Mortgage Brokers: Research your home loan needs or leave it to a Mortgage Broker?
Most people these days use a mortgage broker to source their home loan, but many still do it themselves. So why is the best way for you?
Comparing Mortgage loans
I can recall when choosing a home loan was an easy exercise. All you had to do was look at the mortgage rate, and bingo! The lowest rate won. Now its complicated. And its getting more complicated every year. Its as if the banks don’t want you to have all the information you need to make an informed decision, isn’t it? So How do you get the best home loan for you? Well the 2 ways are essentially do the research yourself, or engage a mortgage broker to do the legwork for you. And that brings up a question and the question is. Which is best, and how do you decide?
Discount Mortgage rates
I remember when we used to call this honeymoon rates because they were soon over and then you were back to sometimes higher mortgage rates. Discount home loans rates, introductory rates, never mind about them. They can be more pain than you need. But occasionally their is a good one to look at. Before you preclude discount home loans from your search, be sure, maybe you should check with your mortgage broker first.
Exit Fees: Is Free mortgage switching the new home loan battle ground?
Unless you have been overseas, or living under a rock lately, you would have seen or heard that the big banks have had a “fall out”. Price wars, mortgage wars. It all sounds too good to be true, doesn’t it? And maybe it is!
The Banks are making World Beating Profits on the back of your home loan
It seems that Westpac is making record profits and paying World beating dividends to shareholders because they have managed to charge their customers more for their home loans, whilst locking them in with exit fees. Something about banana smoothies did the trick?
The same story with the Commonwealth bank.
The trouble is most of these loans were sold by Mortgage Brokers!
So is it really better to use a mortgage broker? Hmm. Depends on what type of mortgage broker. Your call here.
I suppose it depends on who owns them right? Many mortgage brokers are now owned or controlled by the big four banks!
When shopping the home loan market you can either apply directly to your lender, or you can engage the services of a mortgage broker. Sometimes you’ll end up with the same loan, from the same mortgage lender!
Mortgage Brokers have specialised knowledge
They should know the best offers on right now, and that saves you time and missing good offers.
On the other hand, they may just be selling you the loan that pays the best commission, or what the group’s software says is the best loan. Is it really?
Mortgage Brokers are Independent: Or are they?
A fews years ago mortgage Choice, Australia’ biggest home loan broker said that they were independent, and advertised as such. Well it appears that the ACCC disagreed and fined then and stopped them advertising this “fact”.
Here’s the core issue. Mortgage brokers work for who pays them. If you pay your mortgage broker a fee, then he works for you, and should be refunding the commissions paid. But most home loan brokers get paid by commission for introducing clients to the bank. You see the problem. They are not independent, they work for commission.
You have probably met home loan brokers who tell you that their service is “free” and that they are independent. It isn’t true.
Free is nice, but are Mortgage Broker services free? Quick answer: NO
If a mortgage broker gets dressed up and drives his or her car miles to see you at night or in you office, and spends hours with you and more in back office work, how can they do this for free? Well you now know its not free. Home loan brokers advice is given in the hope that they will earn a commission.
And by the way they earn every penny. I just wish they would sick to the facts, without the buttering up.
Mortgage Brokers that are owned by Major Banks
Somehow, the ACCC and the Australian Government have allowed Australia’s biggest brands to fall into the hands of Australia’s major Banks. Now they are scratching their heads and wondering why there is no competition in the Mortgage industry. Its because the competition is now owned by the big bank dummy!
The same goes for mortgage brokers owned by big banks. Its a bad idea, and its a worse idea to use them in my view.
Mortgage Brokers that sell their own brand. Are they really Brokers or just sales people?
Aussie home loans started this trend, now others are joining in the fun.
If a home loan broker has their own loan product, and sells that product most of the time, is that a mortgage broker? You decide.
There are a lot of good reasons to do the initial home loan research yourself. And there are a lot of good reasons to use a mortgage broker too. In the end you decide. Maybe you should do both?
