Best Mortgage Broker In Sydney
Are You Trying to Scout Out The
Best Mortgage Broker In Sydney?
If your question is, “How do I find the best mortgage broker in Sydney?” or anywhere else for that matter, it can at times be a little tricky.
What’s going to impress you the most, what’s going to fit your comfort zone snugly?
Is it going to be one that has sizable mortgage settlements every year? Is it someone with the most online reviews?
Or, are you looking for someone that has been around the block (experienced) a few times?
There will always be an inherent difficulty trying to pin-point the best broker by any single one of the above methods. However, if you’re able to blend all of those characteristics together, then you will probably be onto a potential shortlist of the best mortgage brokers in Sydney.
It’s going to be hard to determine the worth of any mortgage broker simply by any one characteristic, whether it be their settlement volume, the number of reviews they have, or their experience. Nonetheless, put it all together then you could have yourself a shortlist of potentially great mortgage brokers.
So, How Do You Find Yourself The
Best Mortgage Broker In Sydney?
A good starting point is to come to terms with the understanding that the best mortgage brokers usually aren’t ‘all things to all people’. They’re good at what they do because they tend to focus on a specific market segment.
Many brokerages can have the tendency to spread themselves, over home loans, business loans, commercial loans, equipment loans, personal loans, car loans etc., trying to please everyone.
I heard a story once that conveyed a great deal of meaning. You see, there was this monkey (no offense intended to monkeys) who came across a jar of biscuits. After figuring how to get the lid off, he put his hand in and grabbed a fist full of biscuits.
However, his fist ball was so big he couldn’t get it back past the neck of the jar. Doggedly, he tried to twist his fist this way and that, but to no avail. But come hell or high water he wouldn’t let his prize go, and eventually he starved to death.
For example a first home buyer is going to have vastly different needs to a small business operator who may be looking to put up the equity in his or her home to obtain business funds.
Moreover, you’re not always going to initially identify whether or not you’re talking to a major league professional broker or a crummy one.
That said, after you have assembled yourself a shortlist of what looks like quality mortgage brokers around Sydney or possibly anywhere else, we give you full unrestricted permission (lol) to use the following list of questions to help you sort out the good ones from the all so rans.
- Do you directly hold a credit licence or alternatively are you covered as a Credit Representative under an aggregator’s licence?
- Are you a member in good standing with the Mortgage & Finance Association of Australia (MFAA) or Finance Brokers Association of Australia (FBAA)?
- How long have you been in the mortgage brokering industry?
- Which banks and lenders do you interact with most frequently and the reasons why?
- What kind and how many customer testimonials and reviews can you show me?
- What are your points of difference that sets you aside from other brokerages?
- What does your panel of lenders look like? How many lenders will I have to choose from? Should they have a limited number of lender accreditations, like 20 or less, then you might be getting the short end of the ‘range of choices’ stick.
- During the last 12 months how many lenders did you submit mortgage applications to? An unbiased independent mortgage broker will use a variety of lenders to ensure that they are servicing their customer’s individual special needs. A reasonable answer would be at least eight different lenders.
- Do you have areas of expertise? Do you prefer to work with clear-cut client categories with their specific needs and wants?
To be fair though, there’s probably no correct comeback for that final query.best-mortgage-broker-in-sydney
What is the Role of the Best
Mortgage Broker In Sydney?
What you’re really looking for are brokers who have expertise in the precise class of mortgages that you’re after. Are you a first home buyer, next home buyer, refinancer, investment property buyer, self-employed borrower, etc., or you might be looking for a low doc, SMSF loan, equipment finance, possibly a business or commercial type loan?
A good mortgage broker who specialises in residential mortgages will readily tell you what their area of expertise is. Because, they will be making all the money they want to make in the Sydney loans market by doing what they’re best at. On the other hand, they don’t want to end up looking like a fish out of water; it just slows them down when they venture outside of their field of expertise. Also, when you choose a mortgage adviser that has proven expertise for the type of loan product you’re after, it will definitely improve your quality of life by saving you time, money and stress.
What Does A Mortgage Broker Do?
There is any number of ways of getting you a home loan. However, these days, well over half of all mortgages taken out by Australians are now going through mortgage brokers. But how will a truly professional mortgage broker operate and how come they’re becoming so popular?
It doesn’t matter if you’re looking for a mortgage to secure a property purchase or refinance your existing mortgage, more and more people are turning to a mortgage adviser for their mortgage solutions.
The Benefits of Using a Professional Mortgage Broker
All the same, what will a professional mortgage broker actually do for you personally and why are so many others turning to mortgage brokers to help them with their home loan?
A mortgage broker’s role is to help you obtain a home loan or mortgage on the best terms.
The mortgage broker role is to assist you with securing a property loan by acting as a negotiator with lenders, like the big banks, second tier banks, credit unions, building societies, non-bank lenders, money managers etc.
They will have a panel of lenders that they are accredited with where they can swiftly access the details of any loan offered by those lenders utilising specialised cutting edge software.
A mortgage is for a long time and you’ll find the best mortgage brokers will take the time and make the effort to find out what your real needs are not only for your immediate requirements, but also have the depth of knowledge on how any choice made will affect your finances over the long term.
So, an expert mortgage broker will take the take the time to custom tailor and fit the right loan to your individual situation, and then guide you on putting together the application and arranging the required documentation for the chosen lender.
How do Mortgage Brokers Work?
Once the application has been submitted the broker will monitor its progress through the processing system on your behalf and keep you regularly informed along the way.
They will take care of all kinds of other functions also, like co-ordinating and keeping informed other parties involved like real estate agents, conveyancers/solicitors, builders etc. Once you have been approved they will walk you through your loan offer agreement ensuring everything is correct there and push (if necessary) to get your loan settled on time.
In essence, you won’t have to go through the stress of figuring out where you can get the best deal, as the broker will hunt that down using their handy software programs and quickly present you with a targeted shortlist of the best options. Or, stress out wondering where your application is up to once the lender starts to process it.
All this for free, brokers (in the main) don’t charge their clients as they get paid a commission by your chosen lender.
Broker’s commission do not increase the cost of a mortgage. In fact a good broker can at times get you a better rate than if you went directly to the bank.
Why Use a Mortgage Broker?
Finding just the right mortgage is not as straight forward as finding the lowest interest right these days. While it’s at the top of the list, there is any number of variables. Are you a first home buyer with a small deposit, are you buying your next home while selling your current home, refinancing for house extensions, debt consolidation or any number of other reasons, buying an investment property and so on? Another important consideration can be what stage of life are you at?
Another important thought these days when applying for a home loan, do you meet the current mortgage compliance regulations? After the Banking Royal Commission and now with the pandemic issues we are all dealing with, obtaining a home loan approval can now prove to be more difficult than it used to be.
That said, once you have found your best mortgage broker in Sydney they will have the ability to guide you to the right loan types and options, thoroughly explaining the positives and negatives of each, so you won’t be left wondering.
Of course you could stroll down to your local bank or some other lender, maybe scroll through the online options and submit an application without even having to get out of your chair. On the other hand you could hunt down the best mortgage broker in Sydney and draw on the strength of a real home loan expert to save time, stress and potentially thousands of dollars.
Can I Find an Independent Mortgage
Broker in Sydney
First up: Before we venture into the area of suggesting we are an independent mortgage broker, by law we are required to ensure that you are aware that we get paid commissions by lenders that we successfully submit mortgage applications to. Based on how the lending compliance laws are structured they say we can’t classify ourselves as independent mortgage brokers. So, the following content is to provide an explanation of what we need to tell you when we use the word independent.
It is a fact, a number of large mortgage broker groups are now majority or partially owned by large banks.
If your aim is to find an independent mortgage broker in Sydney, how will you be able to confirm that you have found one?
There are a few questions that can be asked on what commercial interests they could have with other business entities and how they’re being remunerated. Interestingly enough there are not a lot of mortgage brokers in and around Sydney that can stake the claim of being “independent”. However, that doesn’t mean you won’t get great service.
When looking for an independent mortgage
broker, what else is important?
It should be said, even if you’re not dealing with an independent mortgage broker, there are a few items worth considering before making any decisions. When you’re talking to any brokerage you can just straight up ask, ‘are you owned by a bank’, or ‘who are you owned by’?
Master Mortgage Broker Sydney has no direct affiliation to any bank or lender. Nonetheless, you may be surprised to find out that lender affiliations happen a lot more often than many people realise.
Be that as it may, will those brokers be biased towards those lenders loans? From experience, not necessarily, based on consumer law they would be walking a very thin line if they were to promote lender controlled loan merchandise.
That said though, at the end of the day, how would you prove that? No matter how anyone wants to spin it, there’s always going to be some innate conflict of interest when it comes to those scenarios.
As with all Master Mortgage Broker Sydney finance offerings, we provide our mortgage brokering services on a fully independent footing. We believe integrity is the most valuable asset we have.
The Mortgage Broker Vs Bank Debate
Most mortgage brokers offer their services for free for almost any home loan you could want! The fact is, generally speaking you’re going to be paying less by going through a mortgage broker than dealing directly with any bank.
Think about it for a moment, is your bank going to point out a better deal across the road, should one be available?
I don’t think so!
When it comes to the broker vs bank story the bank is only going to give you what they think they can get away with. While the broker has no such bias and will strive to negotiate the best deal they can in order to cement your deal with them, make sense?
Other mortgage broker vs bank benefits are, brokers offer you more choice way up and beyond any single bank can. Why limit yourself to a smaller range of options when there are thousands of options that can be reviewed and assessed in seconds through a tech savvy mortgage broker.
Then there’s convenience, you can get on with your life and can drink your coffee or tea in peace while the broker will take care of all those mind numbing details in getting your application processed.
After all, do you really have the time to run back and forth or sit on hold with banks these days?
You may have also noticed that banks think they are very clever these days by luring customers in with tantalising deals and then as time goes by they don’t pass all of the rate cuts on, or they arbitrarily increase rates for one reason or another.
Then 3-4 years later if you check what they’re offering new borrowers compared to what you’re being charged, you find you’re getting the short end of the stick.
A together mortgage broker will be monitoring what’s happening to their customers and will keep them well informed. No bank is going to though, are they?
How do Mortgage Brokers Get Paid?
Mortgage brokers work on commissions paid by each of the lenders where they submit successful mortgage applications to. They get paid an upfront commission on the drawn balance of the loan and a monthly trail commission on the ongoing remaining balance of the loan while it’s still in place.
On the other hand, that commission can be clawed back in by most lenders if the customer pays the loan out within a specified time frame. In general there’s a 100% claw back of the commission within 12 months and a 50% clawback within 12-24 months (depending on the lender).
Paying the loan out early could only be for a few main reasons, the customer isn’t happy with the bank, isn’t happy with the broker, has found a much better deal elsewhere or has enough money to extinguish the mortgage altogether.
The upfront commission is based on a percentage of the drawn down loan balance. In the main, this is typically anywhere from 0.5% to 0.72%. However, there will be a few rare instances where the commission amount could be figured at a lower or higher rate than that. Very few though.
The monthly trail commission they get paid can vary widely from lender to lender. Approximately though, it ranges from 0.010 to 0.030% per month on the remaining balance at any given point of time through the life of the mortgage.
A good broker who values their clientele recognises the worth of that trail commission and will stay in touch with their customers to ensure that they are being well served.
Do Mortgage Brokers Charge Fees?
In some cases some mortgage brokers will charge a fee to the customer. Nonetheless, that’s an exception to the rule. This can happen when the broker assesses the loan as very difficult or unlikely to be approved without a lot of work.
Sometimes, a broker will ask an upfront fee if they feel the loan is not only difficult, but they suspect the customer is shopping around among other brokers or lenders and they (that broker) will end up putting in a lot of work and the customer is going to end up going elsewhere anyway and they don’t get paid.
That said, it’s more common for commercial loan brokers to nominate an upfront fee on difficult commercial loans (as they can be quite complex). Because they will get paid a commission by the lender for a successfully placed loan, some brokers will offer to refund the upfront fee, once the loan is successfully placed and it settles.