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2020-03-20 Property Tips
Author: Satterley

Could a mortgage broker help with your home purchase?

For most people, buying a new home involves securing a home loan. And home loans, like any financial product, can get a little bit complex. For good reason, plenty of purchasers turn to the advice of a mortgage broker to assist them with what can be a challenging process.  

Ideally, you should contact a broker before you begin your property search, because they can offer advice on your borrowing capacity, but if you’ll already found your perfect block of land, they can still be a huge help.

As for costs, many brokers in Australia offer advice without charging a cent. Sometimes there are fees involved in processing your mortgage application, but brokers generally make their living through commissions: the banks and lenders who provide the home loans pay them for their recommendations.

We wanted to find out more about what a mortgage broker does and how they can help you with the financial aspect of buying a property, so we spoke with Ahmed Hossain, a Senior Finance Broker at Loan Gallery Finance.

What’s a mortgage broker – what do they do and how can they help?

Ahmed told us that a mortgage broker is as much a coach as an agent.

“Mortgage brokers educate consumers and help them navigate the complexities of the mortgage market. They help consumers obtain a mortgage product that meets their financial circumstances and needs,” Ahmed explained.

He said mortgage brokers could help all sorts of people, but were often particularly helpful for those with little time to sift through the intricacies and fine print of the mortgage industry.

How will a broker help you once you contact him or her?

“A broker will arrange a consultation and preliminary assessment which will give prospective buyers a guideline of their borrowing capacity, deposit requirements, lenders, products, fees, and so on.

“Also, the broker will set up a detailed plan for the purchaser to achieve their goal of home ownership,” Ahmed said.

Can a mortgage broker make securing finance easier and less expensive?

Ahmed told us that financial information is difficult to digest at the best of times and that it’s becoming increasingly complex in the mortgage market. It’s no wonder then that he’s found that the home loan application process can be daunting for many consumers. Ahmed says a central part of his job is easing anxiety.

One of the ways he does this is by saving buyers the time that they would otherwise spend updating their financial literacy, sorting through information and cross-checking offers and product details.

“Mortgage brokers reduce search and matching costs for consumers by helping them compare deals across lenders. This helps those consumers that are information- and time-poor to avoid the costs associated with expanded choices,” Ahmed said.

“Based on a customer’s situation, their broker can negotiate a better interest rate prior to applying for approval. The mortgage market is very competitive, and lenders compete against each other for business.”

Ahmed’s advice if you’re thinking of buying in a new community

Ahmed has helped many clients buy land in new communities around Victoria and says that although all purchases are different, he has seven general steps everyone should follow in this situation:

  1. Research the local area and the community itself.
  2. Choose a reputable developer who has a track record of delivering and creating great communities.
  3. Make sure your finance is in place before you sign your contracts – for your land and your build.
  4. Check local and state governments’ infrastructure plans for the area.
  5. Property is generally the biggest purchase anyone will ever make, so get appropriate advice.
  6. Hire an independent builder inspector to inspect your newly built home.
  7. Don’t overcommit yourself. This is a very long-term commitment and the less you spend, the less you borrow, which means the less you pay back with interest.

If you’d like help finding a broker our Sales Teams would be happy to help. You can find our sales office contact details here.

You can also contact Loan Gallery’s Victorian office (where Ahmed works) on 9495 5000.

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