Most people living in Melbourne are renters and only a few own their home outright.
As house prices can go through the roof, apartments can be affordable for first-home buyers in Melbourne.
That’s why you need the help of a good mortgage broker to give you insights into Melbourne’s property market and guide you through the home loan process to get you approved.
Find out whether a bank or a mortgage broker is the best option for you and what you can do to find the best mortgage broker in Melbourne.
Finding the perfect home is only half the battle on your path to home ownership.
The other half is choosing the right home loan to finance your dream.
So, when getting a home loan, should you go to a mortgage broker or directly to a bank?
Why should you go directly to your bank?
- You need the convenience of having all the financial information with one lender.
- You have a good relationship with your bank (however, your bank might not have a home loan that suits your needs.
- You have thoroughly researched your home loan options and found out that your bank provides you with the right solution.
Why should you choose a mortgage broker?
- You need an expert who will be with you throughout your home loan application process and beyond settlement.
- You want to save time on finding the right home loan by having a range of lenders and options.
- Your needs require a home loan solution that does not quite fit a bank’s lending criteria.
- You need an expert to understand your complex circumstances and find you a competitive deal.
If you’re still on the fence about choosing either option, you can read our page on Bank Vs Mortgage broker.
What is a mortgage broker?
A mortgage broker is an expert who will act as an intermediary between the borrower and the bank/lender.
- Do not directly lend you money
- Are not loan officers who work for a particular bank
- Work in the best interests of the borrower not the bank
A mortgage broker’s main aim is to help you obtain the finance you need for the property you want to buy (or refinance).
They will seek to:
- Understand your situation and goal
- Assess your finances
- Compare a broad range of home loan products
- Be with you throughout the home loan application journey and even into the future, to ensure you continue to have a loan solution matched to your needs
How can I find a good mortgage broker in Melbourne?
With its population tipped to reach more than 8 million over the coming years, Melbourne has a potential list of emerging suburbs and competition for properties can be intense. A good mortgage broker can give you an edge in such a challenging market.
A good broker understands the property market trends, helps you decide suitable areas to buy, gives you property and suburb insights, and helps you secure a home loan.
A good mortgage broker would know if the apartment you’re eyeing had any cladding issues, for example, and the measures taken to rectify these issues.
Here’s how you can start your search for a broker:
- Ask your friends and family for referrals to mortgage brokers they’ve worked with. Even your real estate agent or buyer’s agent might have some connections to good mortgage brokers.
- After creating a list of mortgage brokers, do your research and review your options. Visit their websites and social media platforms and read reviews online to find out what customers are saying about them.
- Find out if the mortgage broker or brokerage has won industry awards.
Remember, it’s not just about choosing a local mortgage broker, but a mortgage expert that will help you throughout your home-buying journey.
Before you decide on a mortgage broker, ask them these questions.
Are you accredited?
The mortgage broker must have an Australian Credit Licence or be an Australian Credit Representative.
They must also be a member of either the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).
At the minimum, mortgage brokers need a Certificate IV in Finance and Mortgage Broking.
Does a bank own you?
Banks own some mortgage brokerages. Those brokerages are often incentivised to recommend products from the bank instead of choosing a lender that best suits your circumstances.
How are you paid?
Mortgage brokers don’t always charge you for their services, they are primarily paid in commissions directly from the bank. Best-Interests Duty (BID) requires a mortgage broker to give you valid reasons why they chose your mortgage options. You should ask how they make their pay so you can be aware of any potential incentives they have to offer certain products.
Who are the lenders on your panel?
Mortgage brokers are restricted by the list of lenders they have on their panel. A good mortgage broker needs to have a wide range of lenders, from major banks and regional banks to specialist or private lenders.
If the lender panel is too limited, you will get limited home loan options.
Which lenders do you work with frequently?
While having a wide range of lenders is good, ask the broker which ones they work with frequently, and how many lenders they generally deal with each year.
Even with access to a broad lender panel, if the mortgage broker keeps favouring one or two lenders, it could be a red flag.
What is your experience in the industry?
Besides knowing how long the mortgage broker has been working, get details on how long the brokerage has been in business.
An experienced broker would have helped borrowers with unique situations and established good relations with Business Development Managers of different banks.
What are my chances of qualifying for a home loan?
It’s best to work with an honest mortgage broker from the get-go and not someone who over-promises and doesn’t deliver.
A mortgage broker should set realistic expectations about the home loan options and rates available.
A good mortgage broker will assess your borrowing power so you can find a property you can afford.
Is this the best deal for me?
A mortgage is a long-term debt, so even a slightly lower interest rate could lead to thousands in savings. However, the interest rate is only one of the many aspects a mortgage broker will review before considering recommendations to you.
What else does a good mortgage broker do?
Mortgage brokers will review whether you can repay the mortgage without getting into financial hardship. They will also look for applicable offers and home loan features that can help you save money throughout the life of your loan.
As there are numerous mortgage brokers in Melbourne, finding the best one for you is a matter of individual circumstances and your property buying goals.
A good mortgage broker will:
- Ensure you enjoy a smooth process from the time you contact the broker to settlement and even beyond settlement.
- Liaise with all the parties involved in the home buying process, from the lender and real estate agent down to your conveyancer.
- Take the time and patience to understand your goals and find a suitable product to help you achieve your objectives.
- Help with the tedious paperwork you need to fill out during the application process.
- Let you know upfront the documents needed during the application process, so there’s no back and forth chasing missing information.
- If you’re a first-home buyer, a good mortgage broker in Melbourne will help you complete the application for the First Home Owners Grant in Victoria and work out how much you’ll save in stamp duty.
- Take the time to talk you through the home loan features and interest rates.
- Let you know what costs are involved when buying your home, including application fees, stamp duty and other miscellaneous expenses like valuation fees.
- Let you go at your pace instead of hurrying you to make decisions. A good mortgage broker will also take note of important deadlines.
A great question that a mortgage broker will answer when assessing your application is, “Would I lend this borrower my own money instead of the bank’s money?”
If the answer is no, then a good mortgage broker will identify why and determine if any credit exceptions can be made to resolve the issues.
Why choose Home Loan Experts as your mortgage broker?
At Home Loan Experts, our mortgage brokers are credit experts and work to get tough loans approved.
- We have 50+ lenders on our panel, which means more home loan options for you.
- We can provide you with free valuation reports, property reports and suburb reports once you’re pre-approved to buy a property in Melbourne.
- We can negotiate discounts and get competitive rates on your home loans.
- We build and maintain relationships with decision-makers at lenders and banks in Melbourne to help get your mortgage approved.
- Our mortgage brokers are with you throughout your home loan journey. We even have a dedicated settlement team that will look after you once your loan has settled.
- Our mortgage brokers and the brokerage have won numerous industry awards.
Learn more about us and find out how we tailor home loan solutions that suit your needs!
Our mortgage brokers are here to help you. Call us on 1300 889 743 or fill in our free no-obligation assessment today.