How a mortgage broker does more than find you a great rate.
Nearly half of Australians who take out a home loan rely on the support of a mortgage broker. Why? Because unlike a bank, a broker can take an impartial view of hundreds of loans, not just their own, and does the hard work to match the right loan to the goals and financial position of their clients.
As one of Loan Market’s leading brokers, with 18 years’ experience, I'm frequently asked “What value does a really broker add?” Often my reply is far from expected. Why? Because for a long time getting a competitive interest rate was seen as the primary benefit of using a broker. With access to a broad range of lenders and products it’s true that approaching a broker can be a sure fire way to secure a great rate. But rate is just one element of the broker value proposition, and for many clients it's actually not the most important. The broader value that a broker brings is usually what leaves clients pleasantly surprised and what keeps them coming back.
So what makes up this broader value proposition? I proactively seek feedback from clients and here are the top reasons they give for using a broker:
Borrowing capacity - A broker can have a huge impact that transcends the loan transaction itself. I’ve seen first hand many times how this impact can be life changing for the property journey of my clients. For example a recent client initially spoke to his bank directly and was quoted what he thought was a very low borrowing capacity. He then engaged my team. We got involved and obtained an approval from the same bank for $600,000 more than the original - for an amount that met the client’s expectations. The impact? At first the client was going to buy an ‘in between’ home that he would need to upgrade in five years. But with our guidance, the client had the confidence to purchase a forever home - a truly life changing step.
Turnaround speed is a huge reason why clients choose me. The turnaround on my applications averages just 24 hours. Now I’m not saying all brokers are this fast but good brokers have processes and relationships in place that minimise the time from first appointment to pre-approval. Often brokers are even one step ahead on lenders that are approving quickly and the information they’re looking for.
Client relationships are the bread and butter of broking. A broker gives you a dedicated ‘always on’ point of contact from start to finish and beyond. When using a broker you have confidence knowing the broker, or one of their support team, is only a phone call or email away.
Lender partnerships give brokers a strong edge. Brokers partners with many and varied lenders, from big name financial institutions, to small banks and credit unions. This means they have access to 100s of loans and often they can often source special deals and rates from right across the market.
Less legwork can be a reason in itself to use a broker. Clients choose a broker to minimise the time and effort they need to invest in the process, to make the experience easy and stress-free. A broker’s role is to do most of the leg work for you. They act as an intermediary between client and lender. They complete mountains of paperwork, leaving clients to simply review and sign. And importantly a broker liaises with key third parties, including solicitors and real estate agents to ensure a smooth settlement.
Ongoing reviews are something most good brokers offer. And if they’re like me you won’t have to ask for a review because they’ll be proactive. For example I offer my clients an annual interest rate review after settlement to make sure they are always on a competitive loan. On one recent 12 month follow-up I secured a client a 1.35% margin discount on his investment loan, a discount that saved him $10,880 per year and didn’t cost him a cent.
There you have it - the value of a broker goes way beyond interest rate negotiations. A broker plays a crucial role in making the home loan process smooth and hassle free. And in many cases with the support of a trusted broker you can take that next life changing step on your property journey much sooner than you thought.