Ever wondered what a mortgage broker actually does? We get it – it can all seem a bit mysterious. That’s why we’ve put together this article so you can learn exactly what a mortgage broker does and how they can help you.
First things first, what does a mortgage broker do?
Essentially, a mortgage broker is your link to the bank. Think of a mortgage broker as the middleman that makes your life a whole lot easier. A mortgage broker takes care of all your documents, such as bank statements, ID, and pay slips, and they will also submit your application to the bank and give you the best chance of getting your home loan approved.
A mortgage broker knows all the ins and outs of bank policies, and they can help you get your home loan approved and set your loan up in the best way.
You might be thinking, sweet, but can’t I just go directly to the bank and do that myself? Well, yeah, you most absolutely can. If you feel confident in submitting your own application to the bank, go for gold.
However, a mortgage broker might be able to set up your home loan in a better way, they can pick up any holes in your application before it gets sent off to the bank, and given that they know all the ins and outs of the industry and the banking policies, they usually have a trick or two up their sleeves they can share with you. Oh, and they’re usually free to work with (but more on that later).
So what exactly can a mortgage broker help me with?
Several things actually. For instance a mortgage broker can help you with:
- Consolidating debt in order to reduce your payments and thereby enabling you to borrow more
- Cancel unused credit cards (even if you haven’t used your credit card limit it could affect how much you can borrow)
- Review your bank accounts and ensure everything is as it should be. This could be checking that you haven’t missed an automatic payment to Netflix or similar
A mortgage broker will also ensure that the application isn’t missing any details. If you submit an application that has incomplete details you could lose valuable time because the application gets sent back and forth between you and the bank. You might think that you can easily get all the details needed, but actually first home buyers often miss information as the bank requires a lot of specific and detailed information.
A mortgage broker will know exactly what you need and collect all the details from you. Furthermore, a mortgage broker can help you make decisions on how to structure your mortgage. This could be things such as how long you should fix your mortgage for.
So basically, unless you fancy reading through hundreds of pages to review bank policies, or you just so happen to be an expert on mortgages, you probably will benefit from working with a mortgage broker. It will most likely save you time, get you the loan faster, and your mortgage will be structured in a way that’s most beneficial for you.
And you said working with a mortgage broker is free?
Yup, that’s exactly what we said. Well, in most cases working with a mortgage broker is free. There are exceptions but generally speaking working with a mortgage broker costs you nothing.
Um, so how does that work?
Mortgage brokers usually get paid by the banks once your home loan gets approved. That’s why the service is usually free for you. A pretty sweet setup, ay?
Banks do have this thing called clawback.That’s where you have repaid or refinanced your mortgage within two years. The bank will then take back their commission so the mortgage broker may move this cost on to you.
Other times they may charge a fee but they will always disclose this upfront and get your consent to proceed before moving forward.
If you are ready to start the process of buying your very first home (or your 10th for that matter) you can book a korero with us.
Everything shared in this blog post is general financial advice. For financial advice tailored to you, please book a meeting with us.