Why use a mortgage broker?

Currently 60% of all home loans are originated through mortgage brokers.  To some, this might seem surprising.  The role of a broker is sometimes misunderstood - particularly by those who haven’t used one before.  There are lots of good reasons why so many people use a broker to secure a home loan.

Probably the most important one that is that brokers work for you, not the banks. Brokers are an agent for you to make sure you get the best possible loan and at the best possible cost.  Brokers help you decide on the best approach, help you with choosing which option to take, and then manage the application process right through to settlement and beyond.

WHAT DOES A MORTGAGE BROKER DO?

A broker is an intermediary between you and lenders.  The broker’s role is to understand your needs and objectives, and then use their expertise of the mortgage market to find the best option for you.  A broker will have access to a range of lenders and hundreds of products and will be able to match you with the best loan product for your individual circumstances.  They will manage the application process on your behalf and liaise with the bank all the way through to settlement.  They will also negotiate on your behalf to get the best possible deal on your loan. 

For a lot of people, the process of applying for a loan can be overwhelming.  Others may be time poor and find it easier to allow a trusted advisor to manage the process.  Most like the comfort of knowing that a professional is in their corner when they are making such a big commitment.

HOW DO BROKERS GET PAID?

Most finance brokers do not charge you a fee for a standard mortgage loan.  Brokers receive a commission from the lender you choose for referring your business to them.  Banks and lenders across Australia pay very similar commission fees.  There is also usually an ongoing small fee that lender pays to the broker – this is for the broker to continue to assist and support you for the life of your loan. 

There is no premium or penalty for using a mortgage broker.  There are no additional fees, charges, or interest for taking a loan that was introduced to the lender via a broker. 

PROFESSIONAL CREDIT ASSISTANCE

The broking industry is regulated by ASIC and any consumer credit assistance under the National Consumer Credit Protection Act (NCCP).  Brokers are bound to act in the best interests of their customers under Best Interest Duties legislation.  They are required to either hold a credit licence or be a representative of a licensee.  Brokers must complete minimum education requirements, must be insured, and must be a member of one of the industry bodies to operate. 

BLACKWATTLE FINANCE – WHY CHOOSE US?

We pride ourselves on going above and beyond.  We will research all avenues to ensure you receive the best possible credit advice.  We make things as simple as we can and as easy for you as possible.  We’ll provide you with updates and advice and ensure you are aware of each step of the loan process so you are informed.

When you get your approval, or when you pick up the keys on your new place, we are just as excited as you.  We love to build lasting relationships and enjoy the process with our customers.  We hope you choose us to help with your next purchase!

How to speed up your home loan approval

There's no straightforward answer to the question "how long will it take to get my loan approved".  Every application is unique, so the time between your first contact with your bank or broker and approval can never be predetermined. There are, however, some things you can do to help hurry your application along.

A best case scenario for loan approval is usually two or three days.  When the client’s lending position is fairly straightforward in terms of employment, asset and liability position, along with a lower LVR, it's more likely to be a quick assessment.  If there is some complexity in employment status, property type, or loan structure this will often cause time frames to increase.  Also, if the lender has a promotion or particularly good offers on the market this can mean they're busy and therefore slower.  We are also seeing lenders ask for additional information more frequently in recent times, and this creates a to and fro which can extend approval time.  

Disclose all information

To reduce the likelihood of back and forth requests, which can delay your application, ensure your lender has a thorough understanding of you as an applicant including appropriate identification of all borrowers. Provide all the supporting and necessary documents upfront to your broker, and convey as much detail as possible in relation to your requirements and objectives and have good, current information on your financial position. The broker will need to not only have your full financial details but will also need to take reasonable steps to verify it.

Skip the valuation queue

Not all applications require a valuation, depending on the property and lending institution, and forgoing this step can save a considerable amount of time. You can also save time by having a valuation completed prior to your application, as long as it’s accepted by your chosen lender – but check with us first.

To ensure your application avoids any unnecessary delays, speak to us. 

Five things first-home buyers need to know

Before you decide to purchase your first property there are a number of things to consider, including your current personal circumstances and financial status.

1. Think about why you want to buy a home

Do you want to live in it or will it be an investment property? This can help determine the kind of loan you apply for and home you buy, depending on your short and long-term plans.  

2. Research potential properties and loans

Knowing the market is crucial, so do some research on the areas you are targeting.  Check out auction clearance rates and recent sales, as well as price trends in the area. Once you are aware of what you are looking for and the approximate price, the next step is saving a deposit.

While some lenders will offer loans if you have saved less than the usual 20 per cent deposit, being able to show a record of good saving habits will aid in getting your loan approved.

Then, when you talk to us about applying for pre-approval on the right type of loan, we can help to work out what you can afford in terms of repayments.

3. Factor in other costs involved

Depending on the property, there are usually a number of additional costs that you'll need to factor in. This can include, but isn’t limited to, stamp duty, loan establishment fees, legal and conveyance services, utilities, property insurance, maintenance and lenders mortgage insurance.  There are some first home owner grants and tax and duty concessions for first home buyers that you might be eligible for.  Speak to us about what other payments you will face and what concessions you might be able to get.

4. Think about your future

Just because your current situation allows you to get a home loan, that doesn’t automatically guarantee that you will still be able to service it in five years’ time. Is there a possibility your role at work will change? Are you considering going back to study and reducing your working hours?

5. Get professional help

With so many things to consider, getting professional help is highly recommended. We can help you to connect with the expert people for tasks such as property checks, pest checks and any legal queries. Going it alone can prove costly. Avoid nasty surprises down the track by getting the right people to do the appropriate checks for you from the beginning.

Get in touch with us at Blackwattle Finance for great advice about buying your first home.