Does your mortgage broker give you all the information you need?
While mortgage brokers can be a great resource if you have a more complicated home loan or want borrowing advice, before you go down this road it’s important to know exactly what you’re signing up for.
So to help you decide, here’s some things most brokers will never tell you so make sure you ask them to explain the details….
Brokers don’t compare the entire market
Most brokers use an aggregator, which is a third party who has the accreditation to deal with the lender on the broker’s behalf.
These aggregators only compare a select number of providers and home loan packages, which means when you use a broker you won’t have access to the entire home loan market and the lowest rates in the market.
Smaller lenders offering super low rates often aren’t found on broker panels because they can’t afford to pay the commissions. You can go to these smaller lenders yourself, especially when you have a straight-forward home loan.
Brokers get a higher commission for recommending certain home loans
If you sign up with a home loan through a broker they will get paid a commission by the lender, which is a percentage of your loan amount.
Sometimes lenders often run a “commission special”, which means the broker will be paid a higher percentage of the loan amount if they recommend that product to a customer.
While brokers must reveal the commission they receive in the loan documents, they won’t reveal which lenders are offering the biggest commission percentages of the loan amount.
So make sure you ask your broker about the commission they’re being paid and how it compares to other lenders.
Brokers are not property experts
While mortgage brokers can help you decide on the home loan you’ll go for, it’s important to remember they are not experts when it comes to providing you with advice about the type of property you should go for or the tax deductions available to you.
For this type of information, you will need to speak to a financial advisor or tax accountant that specialises in property.
Check it out for yourself
Since brokers only have a number of home loans that they offer to their clients, they will generally not reveal what the best interest rate in the market is.
To find this out, you can search the home loan market yourself. And then ask your broker why they haven’t recommended the home loans with lower rates.
How we can help you
At Craig Tracey Lending we give you independent advice and answer the above questions for you.
We make sure you have all the information you need in simple language that is easy to understand – we call this your “Borrowing Plan”.
Your Borrowing Plan is personalised to your specific needs. It will show you the 3 best lenders for you and clearly explain interest rates, commissions paid and any fees or charges.
Contact us now the find out more: Contact Us Now