For most people looking to buy a property, be it their own home or an investment purchase, it’s more likely than not that they will need to take out a mortgage to achieve their ownership goal.
This means that potential buyers will face an early decision in their ownership journey - and perhaps one they should make before they even decide on the property they want to purchase - in whether they should use a mortgage broker to help them secure finance or go it alone with their lender of choice.
For James Symond, chief executive officer of Aussie Home Loans, potential borrowers need only to look at consumer sentiment when it comes to finding an answer for that question.
“I think the results speak for themselves these days,” Symond told Your Mortgage
“If you look at the numbers, about 50% of the residential mortgage flow in Australia is completed by brokers. Consumers are voting with their feet as they recognise the benefits that come with choosing a quality mortgage broker,” he said.
Like a lot of changes in modern life, Symond believes one of the main reasons an increasing number of people are choosing to engage the service of a mortgage broker is because of the time it saves.
“It’s much more convenient, and it’s really going to save time for people,” Symond said.
“Why spend however many hours researching and trying to find what loan or which lender is the best for you, when you can go to an expert who has all the information right there at their fingertips?”
Symond said brokers are likely to save people even more time and money going forward, as the number of products on the market increases and changes to lending polices make finding the right mortgage a more and more complicated process.
“Right now the market is constantly changing. In no time at all lending and servicing criteria can be completely different to what they were. Brokers are going to know about those changes a long time before the public will and they’ll be able to guide you through it all,” he said.
“The other thing is there are more than 2,000 home loan products on the market now. It’s not like the old days when there wasn’t a whole lot of choice. I don’t think there’s going to be many people out there that have the tools to go through all of those products and find the one that has best structure for them and suits them the best.”
While some people may only ever take out one mortgage in their entire life, those who are multiple-time borrowers will see even more benefit from working with a mortgage broker, Symond said.
“If you go down to the local bank to see the bank manager or a consultant there’s no guarantee that they’ll still be there the next time you go, or if they are you might not speak to the same person again.
“But with a mortgage broker you’re going to deal with the same person for the entire process. At Aussie we’ll soon have 200 storefronts across Australia run by owner-operators. If you’re dealing with one of our brokers and you come in a year later they’re going to remember you and already have an understanding of your situation and that’s going to make life a lot easier when you start the process of looking for another mortgage.”
Just as he doesn’t recommend borrowers should walk in to their nearest lender and ask for a loan, Symond says people should also look around before deciding on which mortgage broker to deal with.
“Taking out a mortgage is a big deal and you do want to make sure that you’re working with someone who will do the right thing by you and is someone you can get along with and work with.
“If there’s a brand or a broker you think you can trust, just try and find some of their backstory. Something as simple as just asking a friend or family member if they’ve happened to use a particular broker or particular franchise and what their experience was like can really help you find the right broker for you.
“The other thing is to talk to the broker as well. There are various types of brokers out there and you want to make sure that you’re working with the right one for your situation. If you’re buying a home you might want to use a different broker than you would if you were buying a property as an investment.”
Though he is firmly in the belief that brokers bring advantages to borrowers in the form of saving time and money, Symond is realistic in recognising that there will be some borrowers who will still prefer to deal directly with their lender.
For some who chose not to use a broker, it may be a matter of perception as many people have been wary of brokers given they are paid commission by lenders.
“I’m realistic. I do believe that we will see more people use brokers in the future, but there’s never going to be a situation where everybody uses a broker. For whatever reason, you’ll always get somebody who doesn’t want to.
“One of the things we’ve done at Aussie is really invest in the training and development side of things and ensure that our brokers have the right support network so we can ensure that consumers are getting the best service.
“There are probably some others out there who aren’t doing that sort of investment and are just targeting commissions, but I think business is going to get a little tougher for them soon. People are starting to realise that there are brokers out there where they can get good service and they’re going to choose them.”
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan