Myths about mortgage brokers
Wary about engaging a mortgage broker to see you through the loan application process? There are numerous myths about mortgage brokers that have put people off using their services. Here we debunk some of the more common myths so you can see how a mortgage broker can help you secure the best possible loan for your next property purchase.
1. Mortgage brokers are aligned with one particular lender Many people believe that mortgage brokers are simply a “front” for a specific lender, so their job is to lure you to that lender. In fact, a mortgage broker is fully licensed, and relies on their knowledge of the whole mortgage market to provide you with the best mortgage for your individual needs.
2. Mortgage brokers will charge you for their time As the client, you do not pay the mortgage broker – once you are approved for a loan, the lender pays a commission to the mortgage broker. The commission is calculated according to the size of your mortgage.
3. Getting a home loan through a mortgage broker costs more because of commission The mortgage broker’s commission is a percentage of your home loan, so it is not an additional cost for you nor is it paid by you in any way. It has no effect on the fees or interest rates you pay on your mortgage.
4. Mortgage brokers deal with shady lenders While mortgage brokers have connections with smaller lenders whose names might not be familiar to you, they generally also deal mainly with the major lenders with high-profile reputations. Many of the smaller lenders are affiliated with the larger banks, or they could simply be low profiles businesses with a long-standing reputation. A mortgage broker relies on the professionalism of the lender to maintain their own business reputation and income, so even the smaller lenders will have a strong reputation within the industry.
5. Mortgage brokers are only for people with bad credit Another pervasive myth is that only people with bad credit need assistance from a mortgage broker. While mortgage brokers can certainly assist someone with bad credit find a suitable loan for their circumstances, they can also help anyone who wishes to save time and money by sourcing the best loan possible for their requirements.
6. All mortgage brokers are fully licensed Unfortunately, anyone can call themselves a mortgage broker, but only a licensed mortgage broker is qualified to give you advice and assistance in securing a loan. A licensed mortgage broker should have the license on display in their office or on their website – if they do not, you are entitled to ask them to confirm their qualifications.
7. A mortgage broker will force you to refinance with a new lender If you are happy with your current lender, there is no reason for you to refinance your loan with someone else. However, your mortgage broker could renegotiate the terms of your current loan on your behalf and perhaps get you a better deal.
Contact us today if you need independent assistance in finding the right home loan for your needs, whether it is for an existing property or an upcoming purchase.