Firstly, just a bit of background into how the relationship between banks and brokers works.
Banks use brokers because they are a cost-effective way to introduce business to them. That means they don’t have to pay brokers’ salaries or cover their rent and other expenses. When a bank pays a commission to a broker the loan has to stay with that bank for a certain period of time (usually up to 27 months), or that commission has to be paid back by the broker in part, or sometimes in full.
As mortgages and mortgage applications are often complex banks don’t have enough experienced staff to cater to the market, hence brokers fill the gap by bringing ready-made applications to them. Good brokers will service their clients over the life of their loan helping with top-ups, re-fixing rates, new purchases and restructures.
The lending world at the moment is getting more complex and more onerous with paperwork. Banks are drilling down on expenses and affordability a lot more than they used to—this is much to do with the Responsible Lending Code and what’s been happening to banks in Australia.
Talking to an experienced broker will help you find which bank will best suit your situation a lot quicker than you could maybe do yourself. Banks’ availability of low-deposit loans is also limited—a broker will help find out quickly which banks have available funds, or if there are other options such as First Home Loans or using non-bank lenders.
If you are an existing home owner wanting to trade up or buy an investment property, a broker can help guide you through the best way to present an application to a lender. This will help to get the best structure for you and improve your chances of approval. Of course, brokers always have a handle on what is happening with interest rates behind the scenes and can negotiate a favourable deal based on your circumstances. This should also include a plan to get mortgage free as quickly as possible.
A broker firm like ourselves is also on hand 7-days a week to answer questions and guide you through the process in an impartial way.