There are many advantages to using a mortgage broker when it comes to buying a house. First of all the mortgage broker will understand all the small print that appears on all loan agreements regardless of from whom you may have gotten the loan and so they are able to explain to you, in detail, what all the small print means so that you do not inadvertently enter into a repayment agreement which you cannot keep to. This on its own is perhaps reason enough to get the services of a broker when buying a house but when you add to that the fact that the broker will undertake all the time consuming leg work for you as well, their worth really starts to become clear.
Nowhere are the services of a mortgage broker more often used than perhaps in Australia and there is good reason for that. Although in most countries there are mortgage brokers, for buyers to use one will cost them a broker’s fee and often people do not think that the fee is worth it and so undertake the time consuming process themselves however, Australia is perhaps unique in so far as there, it is the lender that has to pay the broker’s fees. Obviously with no additional fees to pay, buyers are more apt to use a broker and thereby gain from their experience. It is not as you may think either, that the lender passes on the extra expense to the borrower; they don’t they pay that themselves and do so willingly as they gained the extra custom thanks to the broker.
In Australia today, more than 50% of all loans are negotiated by brokers and brokers are taken very seriously when it comes to being honest and dependable. To ensure the integrity of the brokers in Australia, they are regulated by the Australian Securities and Investments Commission and that commission will hold any broker financially responsible for not properly looking after a buyer’s needs. Many of the better brokers are now well respected and a top Mortgage broker may even get accredited to become a member of the Mortgage & Finance Association of Australia (MFAA), a highly regarded organization.
The duties that a broker undertakes is first to establish what sort of home the buyer is looking for and then evaluate what price the buyer may be able to afford. Having established that, the broker will find a suitable property and then seek to find a lending establishment that will agree to lend the money to the buyer. This is a process that does not take a broker as long as it would a buyer doing it all on their own as the brokers are familiar with the lending establishments and will only meet with the ones most likely to agree to the loan. Of course though, even though the broker does all of this and can even get pre-approval for the loan, they must confirm with the buyer before allowing the loan to be implemented.