Important Things to Understand About Mortgage Brokers

Mortgage brokers can provide an invaluable service if you are trying to buy a house, especially you first one or if you are on a real budget.  Essentially being financial advisors who specialise in the mortgage market, any quality mortgage broker will have detailed and in depth knowledge of the market and be able to channel this into helping you get the best deal on your mortgage.  There are those that argue that mortgage brokers are unnecessary given that they serve a similar purpose to a comparison website, however this is an unfair representation of companies like Multi-Choice, whose staff work tirelessly to ensure that their customers always get the best deal.  Yes, they compare deals, but there are some important things you need to understand about mortgage brokers before deciding if you want to consult one or not.

Market access

Mortgage brokers essentially come in two varieties, those who work for specific groups of lenders, and those who are independent.  At first, you may think that the whole market is definitely the way to go, but there are merits to both.  Specific mortgage brokers are sometimes able to access special rates and deals that are limited to a lenders existing clients and whole market brokers might not have access to these.  Whole market brokers aren’t restricted to any particular lenders and can advise you on deals from across the market in general, but it is less likely that they will have access to any of these special deals.

Cost

Normally, brokers who are linked to a group of lenders are paid exclusively via commission and as such will never cost you a cent.  Whole market mortgage brokers however, can charge a couple of hundred dollars upfront for their services.  This is an important consideration, you should always ask about fees before agreeing to anything along with being wary of brokers that are pushing certain deals more heavily – there is a chance that they receive a better payout for some deals over others so this is something to keep an eye on.

They will almost certainly save you money

Mortgage lenders are a bit of a strange bunch, and they like to hide deals and offers quite well so having an expert guide you through the maze of options and promotions will nearly always find you a better rate and product that you would have found alone.  It is definitely worth asking your estate agent and people you trust for any recommendations and you should try and see a few to explore your options more fully.

Hopefully this information will make it clear why you should use a mortgage broker in most circumstances, whilst providing a few key points to be aware of.  As with any market that most people don’t use very often the mortgage marketplace can seem intimidating at first, but with a bit of expert help, you’ll be able to find a deal that fits your financial situation and gives you the buying power you need.