This article is going to explain what a broker’s role entails, what fees you can expect, and how using one of the expert brokers we work with can help save your hard-earned dollars by securing you a home loan with the very best rates for your individual situation.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]
- What is a mortgage broker?
- What does a mortgage broker do?
- What to look for in a mortgage broker
- Mortgage broker fees and costs
- Upfront commission
- Recurring commission
- Cash back mortgage brokers
- What factors impact my mortgage eligibility?
- Is using a broker right for me?
- Contact a whole-of-market mortgage broker
Next, they will access the network of providers they act for, compare terms and rates, and suggest the best home loan options for you – based on the information you’ve provided them with.
A broker will then advise you on which product they most recommend, and, once a decision has been made, they will negotiate the loan on your behalf and manage the application.
They will also be at hand to answer questions and give advice throughout the remainder of the process right through to settlement, to ensure everything runs smoothly.
Bear in mind that many mortgage brokers only work with a select number of financial institutions, so you will only have access to the offers from that limited group of providers.
This is why working with a whole-of-market broker such the ones we work with is advantageous; with access to over 100 lenders, they scour the entire mortgage market to find the very best deals, tailored to you. Make an enquiry today.[/vc_column_text][/vc_column][/vc_row][vc_row el_id=”look”][vc_column][vc_empty_space][tek_sectiontitle st_title=”What to look for in a mortgage broker” st_title_tag=”h2″ st_subtitle_decoration=”subtitle-text-underline” st_separator_enable=”separator_on” st_separator_position=”below_title” st_separator_style=”solid-line” st_separator_width=”sep-border-width-2″ st_text_align=”text-left” st_width=”st_fullwidth”][vc_column_text]Choosing the wrong mortgage broker can be expensive, so find out whether they charge a fee and any other associated costs – more on that later.
Make sure to seek out a reputable broker, preferably one with several years’ experience. After all, buying property is likely to be the biggest purchase of your life, so it’s essential to do your due diligence.
On a basic level, your broker should have all the relevant qualifications and be up to date with industry knowledge. They should have good people skills, and be knowledgeable and confident when discussing lenders and mortgage products.
Finally, if you want the most competitive terms on your home loan, seek out a broker that is whole-of-market so you have access to the very best deals available.
We only work with home loan brokers who are whole of market, and if you make an enquiry with us, will introduce you to the right advisor for your needs and circumstances free of charge![/vc_column_text][/vc_column][/vc_row][vc_row el_id=”fees”][vc_column][vc_empty_space][tek_sectiontitle st_title=”Mortgage broker fees and costs” st_title_tag=”h2″ st_subtitle_decoration=”subtitle-text-underline” st_separator_enable=”separator_on” st_separator_position=”below_title” st_separator_style=”solid-line” st_separator_width=”sep-border-width-2″ st_text_align=”text-left” st_width=”st_fullwidth”][vc_column_text]Generally speaking, most mortgage brokers don’t charge borrowers a fee (although some do, especially in particularly competitive cities, or if they’re relatively new to the industry).
So, how do brokers make their money? The majority work on a commission basis, paid for by the lender when the deal has settled.
There are two types of commission brokers can work to: “upfront commission” and “recurring monthly commission”:
Upfront commission
Upfront commission is the most common. The amount they charge varies by lender, but is usually between 0.3 – 0.7% of the loan value.
Recurring commission
Recurring commission is based on the remaining loan amount for each year of your home loan, and is paid to the broker on a monthly basis.
This type of commission is less common, and pays a smaller percentage – usually 0.3% or under.
Cash back mortgages
Some mortgage lenders pay their customers a cash lump sum on completion of a home loan. This is referred to as a “cash back mortgage”.
There are two main ways a cash back mortgage can be offered by a mortgage lender:
- Cash back mortgage at a lender’s standard variable rate (SVR).
- Cash back mortgage offered alongside another mortgage product.
A cash back mortgage based on a lender’s SVR can potentially land you with a good wad of cash. The sum can be as high as 6% of the total mortgage amount, and can be used for any purpose. However, as it’s not paid until after completion, you are unable to use this towards your deposit.
Cash back mortgages offered alongside another product (such as a fixed rate or discount rate scheme) are more common. With this type of home loan deal, the cash payout tends to be smaller, and are usually used to cover legal fees or home valuations.
If you’re interested in finding out more on cash back mortgages, make an enquiry and we’ll put you in touch with a specialist.[/vc_column_text][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1567762653127{background-image: url(https://ml0rrzn3serq.i.optimole.com/warmKW8-TIXyQNKx/w:auto/h:auto/q:auto/https://www.onlinemoneyadvisor.com.au/wp-content/uploads/2019/09/circle-background.png?id=7289) !important;}”][vc_column][tek_calltoaction cta_icon_type=”no_icon” cta_title=”Speak to an advisor today” cta_subtitle=”Fill out our quick enquiry form to be matched with the perfect advisor for you.” cta_text_color=”#000000″ cta_button_link=”url:https%3A%2F%2Fwww.onlinemoneyadvisor.co.uk%2Fgeneral-enquiry-form%2F|||” cta_button_text=”Get started” cta_button_style=”tt_secondary_button” cta_button_color_scheme=”btn_secondary_color”][/vc_column][/vc_row][vc_row el_id=”eligibility”][vc_column][vc_empty_space][tek_sectiontitle st_title=”What factors impact my mortgage eligibility?” st_title_tag=”h2″ st_subtitle_decoration=”subtitle-text-underline” st_separator_enable=”separator_on” st_separator_position=”below_title” st_separator_style=”solid-line” st_separator_width=”sep-border-width-1″ st_text_align=”text-left” st_width=”st_fullwidth”][vc_column_text]While a broker will help you find the best deals for your home loan, your individual circumstances play a big role in determining the number of lenders you have access to and how competitive the rates you’re offered will be:
Income and affordability
For typical applicants, the majority of providers cap how much they will loan you at 4.5x your annual salary, although some will stretch to 5x, and handful may consider loaning you 6x your income.
Further to this, you will also be subject to affordability assessments. Affordability is determined by calculating your debt-to-income (DTI) ratio by adding up your monthly outgoings and dividing them by your gross monthly income.
The lower your DTI, the more disposable income you have and the more favourably you will be looked at by lenders.
Loan to Value (LTV)
LTV refers to how much money you want to borrow in relation to the value of the property.
For example, if you have a deposit of $60,000 for a property valued at $400,000 this equates to 20% of the property’s value, and you will require a home loan at 80% LTV.
Most residential providers offer up to 85% LTV, some are happy at 90%, and a handful may accept 95% – depending on your other circumstances. The lower the LTV, the better rates you’re likely to be offered.
Credit history
Having a history of adverse credit can make mortgage providers more wary of lending to you as you are seen as higher risk. However, all lenders work to different eligibility requirements.
Some will not accept anyone who has experienced any forms of adverse at all, whereas other accept even the most severe cases, such as repossessions and bankruptcies.
Often, it is down to the recency as well as severity of the issue – although some providers may request a larger deposit, or cap the amount they will lend you.
Age
Older people can find it difficult to get a mortgage as many providers have age caps. In the past, Australian lenders did not impose any age limits, but this has changed in recent years.
Where maximum age limits do apply, they typically range from 65 to 75 years – but there are still plenty of options available for older applicants.
Get in touch to speak to a later life lending specialist who can secure you the best deal for your home loan.
Reverse mortgages
If you’re over the age of 60, you may want to consider a reverse mortgage. This product allows older Australians to borrow equity from their homes to spend as they wish. These funds can be put towards a second mortgage if desired.
To be eligible, you need to own equity in your property and providers will lend you a certain amount based on how much money you have released. The total sum is repaid when you sell the property, go into long term care or you pass away.[/vc_column_text][/vc_column][/vc_row][vc_row el_id=”right”][vc_column][vc_empty_space][tek_sectiontitle st_title=”Is using a mortgage broker right for me?” st_title_tag=”h2″ st_subtitle_decoration=”subtitle-text-underline” st_separator_enable=”separator_on” st_separator_position=”below_title” st_separator_style=”solid-line” st_separator_width=”sep-border-width-1″ st_text_align=”text-left” st_width=”st_fullwidth”][vc_column_text]So, is using a broker the right option for you, or are you better off going to a bank?
There is no “yes or no” answer to this question, and it will all depend on your individual circumstances.
If you have a good knowledge of the mortgage industry and are prepared to dedicate the time and effort into scouring the market to get the best bang for your buck, then you may not require the assistance of a broker.
On the other hand, if you’re fairly new to the mortgage world then a broker is the best option to save you both time and money. It will also save you damaging your credit score as a result of hard credit checks ran by multiple lenders.
What’s more, some lenders offer discounted rates for going through a broker, and there are also some mortgage providers who only operate via a broker. This means you have complete access to all the deals on the market to ensure you get the best rates available to you.[/vc_column_text][/vc_column][/vc_row][vc_row el_id=”experts”][vc_column][vc_empty_space][tek_sectiontitle st_title=”Speak to a whole-of-market Australian mortgage broker today” st_title_tag=”h2″ st_subtitle_decoration=”subtitle-text-underline” st_separator_enable=”separator_on” st_separator_position=”below_title” st_separator_style=”solid-line” st_separator_width=”sep-border-width-1″ st_text_align=”text-left” st_width=”st_fullwidth”][vc_column_text]At Online Money Advisor, we offer a 5-star service with access to expert brokers who:
- Are whole-of-market
- Already know the lenders to approach for mortgages as they successfully arrange these already.
- Can offer bespoke advice on the property Australian market.
- Are OMA Accredited advisors.
To speak to a mortgage specialist and to find the right lender to suit your needs, make an enquiry.
Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee, and there’s absolutely no obligation or marks on your credit rating.[/vc_column_text][vc_empty_space height=”50px”][/vc_column][/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1568199168451{background-image: url(https://ml0rrzn3serq.i.optimole.com/warmKW8-TIXyQNKx/w:auto/h:auto/q:auto/https://www.onlinemoneyadvisor.com.au/wp-content/uploads/2019/09/circle-background.png?id=7289) !important;}”][vc_column][vc_empty_space height=”30px”][tek_sectiontitle st_title=”Speak to an advisor” st_title_tag=”” st_subtitle=”Fill out our quick enquiry form to be matched with the perfect advisor for you.” st_subtitle_decoration=”” st_separator_enable=”separator_off” st_text_align=”text-left” st_width=”st_fullwidth”][vc_empty_space height=”10px”][tek_button button_text=”Get expert advice” button_style=”tt_secondary_button” button_color_scheme=”btn_secondary_color” button_link=”url:https%3A%2F%2Fwww.onlinemoneyadvisor.co.uk%2Fgeneral-enquiry-form%2F|||” button_position=”pull-left”][vc_empty_space height=”30px”][/vc_column][/vc_row][vc_row full_width=”stretch_row”][vc_column][vc_empty_space height=”50px”][tek_sectiontitle st_title=”Read more about mortgage brokers below” st_title_tag=”” st_subtitle_decoration=”” st_separator_enable=”separator_off” st_text_align=”text-center” st_width=”st_fullwidth”][vc_empty_space][vc_wp_custommenu nav_menu=”10270″ el_id=”column-count”][/vc_column][/vc_row]