A mortgage broker has many uses to people who require finance when purchasing a property. They can provide options, reduce stress and save a lot of time. If they didn’t they wouldn’t be in business. But the only real “quantitative” measure of just how useful a Mortgage Broker can be is found in the actual savings of money to the client. This article addresses ways in which a Mortgage Broker is able to offer substantial savings in costs when it comes to arranging finance for house purchases.
A Mortgage Broker is able to identify different options and outline the difference in the costs for each option. Often clients may have a deposit which if boosted slightly could save them literally thousands of dollars in interest discounts. Not everyone could have the option of boosting their deposit so other options could be identified as to how the client is able to access the same pricing for those that have a significant deposit eg use of a Guarantor, Vendor Financing, Vendor gifting. When all options are exhausted the clients know at least that they have explored them and made an informed decision knowing what each option would cost them.
A Mortgage Broker is able to negotiate the pricing of the loan. A “Pricing” of a loan includes application fees being waived, cash contributions being offered or increased, discounts on interest rates etc. Some if not all of these may be offered to clients directly from the Lender (eg bank) and a client may be thinking that they are getting a great deal compared to what is advertised. But it’s not what the advertised pricings are that the Mortgage Broker will compare their pricing to – it is what the pricings that lenders are offering behind the scenes that are being offered to other clients in similar situations. This means that a client can be confident that the pricing that the Mortgage Broker is the best on offer.
Often lenders differ as to the conditions of the loan approval. These conditions can sometimes be quite costly. For example one lender may request a registered valuation in order for approval to be obtained. If a client only applied to that one lender they may think they have no other option other than getting that valuation. A registered valuation costs $600 and while it does provide the client valuable information the client may not want to spend $600 on a valuation at that particular time given all the other costs that they would have to pay when they are purchasing a home. A Mortgage Broker is able to identify if all lenders will require that valuation or offer the option of going with a lender that does not require those conditions to be met in order for approval to be offered to the client.
Savings in cost is just one way that a Mortgage Broker offers value to their clients. Best of all their services are free to the client. They are paid a commission by the lender that the client ends up settling their loan with. So while they work for the client they are paid by the lenders. This means that for no cost the client can be assured that they will have the best priced home loan that can be offered – advertised or not!
