Pros And Cons Of Working With A Mortgage Broker

When time comes for you to buy or lease a property, there are a number of ways for you to access a mortgage loan. The first step for many is usually a bank or a credit union. Others choose the road less taken and use an online lender or simply ask a mortgage broker to do everything on your behalf. Mortgage brokers are middlemen who act as liaisons between potential borrowers and lenders gathering all the documentation and paperwork and using their lender connections to shop around at a fee for the right lender fit.

When you do decide to go with a mortgage broker, you need to do your due diligence. finding the right broker requires you to do your research so that you do not just make a financial decision blind. Doing your research does not only mean typing 'how to find the right mortgage broker' in your search engine. It also means getting referrals and asking the right questions. Before you make your decision, make sure that you interview at least three brokers before you settle on the one you are willing to move forward with. This may look and sound as overkill but the decision you make will significantly impact your future. We are not talking about a few months. This is a decision that will impact the next twenty to thirty years of your life.

Having said this, what are the advantages and disadvantages of engaging yourself with a mortgage broker?

Save you from unnecessary legwork. 

Think of when you want to buy a house. Isn't it easier for you to work with a realtor and tell him or her exactly what you are looking for so that they can connect you with a list of potential properties. This will save you a lot of time since you will not have to visit every open house in your vicinity. This is the same case with mortgage brokers. They have a network of lenders that they work with and can be beneficial in steering you away from dishonest lenders. Having this knowledge, the brokers are better placed to match a potential borrower with the most suitable lender.

Better access. 

Since mortgage brokers in Melbourne like Mel Finance work exclusively with lenders, you can rely on these brokers to cater to your needs and find you the best deal. You can think of your loan broker as a gatekeeper who is able to give you access even to some of the hard to reach lenders. Brokers may also be in a position to get special rates due to the volume of business they conduct with lenders. This could save you some fees here and there maybe even hundreds of thousands as they could get lenders to waive some or all fees such as appraisal, application and origination fees.

As far as the disadvantages go, the main one is that the broker's interest may not always align with your own. While you are looking to get an affordable interest rate, a broker simply wants to make the most in commission fees. So, you might actually end up paying more in mortgage fees than you would have if you would have simply taken a bank loan.

Another disadvantage is that you may not be getting the best deal. Some lenders can give you better deals than brokers ever could. So, you might want to shop around before you settle on a specific broker.