Buying your first home is a very important decision that deserves the most attention from you. You should be looking for professional guidance and information to help you get the best deal possible.
Investing in a mortgage broker can save you time and effort as well as money by avoiding unnecessary fees from lenders. They can help with your mortgage refinancing needs. Mortgage brokers know all the ins and outs of the industry, so they can find you a competitive loan that suits your needs. They’ll also help you figure out how to get the best option for your situation.
Despite this, many people still have the misconception that if a business has too good of an offer, it probably isn’t legit. They look for broker scams online (sound familiar?), and we’ve exposed the three most common ones out there:
1. Are mortgage brokers expensive?
Simple answer, nope.
This is probably the biggest mix-up out there. Mortgage brokers, who help you at their own expense and are free for borrowers like you, would never get paid a commission from your mortgage lender. Instead, the bank pays them. There are two ways a broker is paid: on an actual loan or for originating it in the first place. You’ll get paid an upfront commission when you start working with us. These commissions can range from $500 for your first commission up to a huge amount when you are bringing in more than five new loans per week. We also pay trailing commissions, which are paid every month to our brokers for the rest of the life of the loan, not just on the first loan.
2. Does the mortgage broker act in your best interests?
The mortgage brokers are paid from the lender’s commission and the broker does not have a say in who their lender is. They will not just endorse higher commissions for their own personal benefit or loyalty as lenders typically have many branches.
Some conditions are necessary for people to offer “recommendations” they think are likely to work out. There may not be a way for them to tell which loan will get you the most money since other factors require careful consideration.
This is false. A broker’s main focus is to help their clients find the best loan for them. The example mentioned previously, of the trailing commission, would make sense if the customer was unhappy with their loan because then they might choose another lender who didn’t charge a trailing commission. Whether you be a real estate broker, insurance agent, or mortgage lender, having happy homeowners as clients is crucial.
3. Wouldn’t a bank prefer working with the individual body over a broker?
This belief is false. Finding a mortgage broker acknowledges both the work you’ve done and your prior credit history to be eligible for as much or more than someone who approaches the bank themselves.
A mortgage broker will find you a lender that best meets your needs and will also ensure all the necessary paperwork is properly completed. They can do this while ensuring they build trust with their clientele.
Many lenders are looking for qualified mortgage brokers and incentives make it easier for them to do this. The commission payouts mean the lender pays less per loan and the broker would likely bring in more customers than an employee could. This is why home loans are almost always sold through brokers these days.
The broker works for you
Remember, there are lots of mortgage broker in Sydney, among them the best mortgage brokers will offer expertise and access to a large number of options. However, as with any adviser, it’s wise to shop around. The ASIC website says that it’s worth doing your own research to determine which NYC broker is most suitable for you.