A mortgage broker has access to many lenders, and by shopping around between these lenders they make sure the lending market is competitive.
Mortgage brokers also compete against each other, which benefits the clients because they keep adding more value to the home loan application process to win clients.
What does a mortgage broker do?
When you contact a mortgage broker in Sydney, they will discuss your unique financial circumstances, your goals and the process of applying for a home loan. They may discuss what type of loans you would qualify for and explain loan features like offset accounts and redraw facilities.
Once you’re ready to proceed, they’ll ask you to provide key information they need to complete your application, such as:
- How much you earn
- Who you work for, and how long you’ve been working for them
- Your contact details
- A list of your assets
- A list of your debts
- Several months of bank statements
- Several months of payslips if you’re an employee
This list will change depending on whether you’re self-employed, have income from multiple sources, or only earn a salary. It will also include your partner’s details if you’re applying for a home loan together.
Mortgage brokers are obliged to tell you if they’re going to draw a credit report and get your permission. They will also tell you what information they must verify, for example your employment.
How does a mortgage broker help you?
The main goal of a mortgage broker is to help you find a mortgage that is right for you. They are also required to act in your best interests at all times, so you can trust them.
Mortgage brokers are familiar with a wide range of lenders. They can compare your financial information to the lenders’ criteria. They’ll shortlist lenders that are suitable and likely to grant you a home loan. They’ll explain the terms of the loans, and variations in loan offers, so you can be sure you’re comparing apples to apples. Then they’ll make a recommendation.
You and your mortgage broker can decide together which offer is going to be best for you, given your personal financial circumstances.
The best mortgage brokers in Sydney won’t stop after your home loan is granted. They’ll keep in touch and talk to you about refinancing your home loan years later because you might qualify for a lower interest rate.
If you’re an investor, a mortgage broker can add value by discussing ways you can expand your portfolio.
Are you a first home buyer?
If you’re a first home buyer in Sydney, you could consider talking to a mortgage broker several months before you’re ready to buy a home.
A mortgage broker can discuss all aspects of a home loan application with you, including:
- How your deposit affects your home loan application
- Why you may need to pay lender’s mortgage insurance (LMI)
- How your credit score affects your home loan application
If you have this information upfront, you’ll be better prepared once you’re ready to buy a home. And if you’re able to put your finances in order before applying for a home loan, you might save money by qualifying for a lower interest rate.
You can also talk to your mortgage broker about the First Home Guarantee (FHBG) scheme. Only 32 lenders participate in this scheme, but your mortgage broker will know which lenders to submit your application to (assuming you qualify).
If you do qualify for the FHBG, you will only need a 5% deposit instead of 20% deposit to avoid paying LMI.
NSW also has grants and subsidies for Sydney first home buyers that your mortgage broker can tell you about – like the First Home Buyer Choice, which lets you choose between making a large one-off stamp duty payment when you buy your home or paying a smaller annual property tax instead.
You may also be eligible for the First Home Owner (New Homes) Grant of $10,000.
