Mortgage Brokers complete the work that used to be done by the banks, guiding the borrower through the process, ensuring that the product they recommend is in line with their goals and meets their requirements and objectives. They analyse living expenses and explain the costs involved in the process to simplify the application process.
Why should I use a Mortgage Broker?
The Mortgage Broker analyses the clients circumstances and documentation to see whether this will fall under a prime home loan or a non conforming loan. If the credit score is below 650 or there is a small paid default the Mortgage Broker will need to lodge this loan with a lender that has appetite for this scenario. If the applicant has bad credit or is Self Employed without up to date tax returns the mortgage broker will need to look towards lodging this loan with a non bank lender that accepts bad credit home loans or for Self Employed a Low Doc Loan is required.
All documentary evidence is gathered by the broker to support the application, servicing demonstrated by completing a lenders calculator and collated for a fully compliant submission meeting the goals and objectives of the customer. Data entry is completed by the broker into the lenders system. The broker also orders and follows up valuation and pricing requests.
Once the application is with the lender, the broker follows up to keep the application moving updating the customer all the way to settlement and beyond.
How are Mortgage Brokers Paid?
Mortgage Brokers are currently paid an upfront fee with a deferred payment known as trail. Should the loan be paid out or refinanced within 12 months a full claw-back is taken meaning the upfront amount paid to the broker is returned to the lender in full. For trail to be paid, the loan must be conducted well and not fall into arrears.
Growth in Market Share by Mortgage Brokers
More Australian home buyers are relying on mortgage brokers than ever before with the latest industry data showing brokers have now smashed the record for market share. In the March quarter of 2022, mortgage brokers facilitated 69.5% of all new residential home loans.
This is the largest market share observed to date across all quarters and is a 12 percentage point year-on year increase on the 57.5% reached in the March 2021 quarter. It is also a 17.4 percentage point increase on the 52.1% recorded in the same quarter in 2020.
