Use a mortgage broker to find the best refinancing deal
If you're thinking of refinancing to a new lender, you can benefit from a broker's expert knowledge of the home loan industry. A broker can not only assess your borrowing capacity and the costs of refinancing, but they can also assist you with the paperwork and negotiate for a competitive rate on your behalf.
Refinancing your home loan at the right time is a great way to save money. Find out how you could benefit from the services of a licensed mortgage broker to ensure that you make the right refinancing decision.
Learn more about the advantages and drawbacks of using a broker and how they can help you with the refinancing process.
Mortgage broker comparison
|Broker||Details||No. of Lenders|
Aussie Home Loans
Aussie is one of Australia's leading financial service providers, having won The Adviser’s Top Mortgage Broker award for the last 3 years. They charge no appointment fees and can meet at a time and place which suits you.
What does a mortgage broker do?
The role of a mortgage broker is not limited to finding people new home loans; they also help you find a suitable refinancing alternative. The fact that you don’t have to pay fees to your mortgage broker— the lender instead compensates them—is a definite plus as it means you can leverage their knowledge without having to pay a fee.
At the same time, it’s important that you review the commission structure your mortgage broker uses, to ensure they are going to find the best deal for you.
A mortgage broker specialises in helping people find suitable home loans. Mortgage brokers remain in touch with multiple banks and non-bank lenders, and while they don’t work for these institutions, they work with them to offer you a range of home loan alternatives. These professionals know exactly what the borrowing process entails, including everything from comparing home loans to applying for them and the settlement process.
Johanna consults a mortgage broker
After researching different home loan products, Johanna felt overwhelmed by the amount of choice available. Unsure about the amount she could afford to borrow and the different rates and features on offer, Johanna decided to speak to a mortgage broker about her borrowing options.
The mortgage broker reviewed Johanna's personal and financial situation and helped Johanna estimate the amount she could borrow from a lender. The broker recommended that Johanna opt for a split-rate loan so that she could take advantage of the flexibility of a variable rate and the security of a fixed rate.
The broker also suggested that Johanna should select a mortgage that allowed her to make unlimited additional repayments, with a redraw facility and an offset account. She explained that these features would help Johanna repay the loan as soon as possible and reduce the amount of interest she'd have to pay over the lifetime of the loan.
Johanna felt relieved that her broker could negotiate for a competitive rate on her behalf and help her through the application process.
How can a mortgage broker help when refinancing?
When it comes to refinancing home loans, comparing your loan options is the obvious starting point. This requires that you compare interest rates as well as a range of loan features. While this process might sound simple, once you realise how many options there are for you to go through, you may be confused and a little overwhelmed. Comparison is by no means a difficult procedure, but it can be time-consuming. With so many alternatives to choose from, you might end up missing some great options.
Getting in touch with a good mortgage broker ensures that you’re aware of the best possible options for your needs, while your mortgage broker presents loan options to you only after taking your needs into account. This can save you a lot of time by removing the need for you to go through products that don’t suit you, plus you also benefit from the expert opinion your broker imparts.
How to compare mortgage brokers when refinancing
Not all mortgage brokers are as qualified or reliable as others, so this requires you to compare the services offered by a few brokers before picking one. To start, look for ASIC registrations and Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA) membership. The former is a prerequisite for mortgage brokers to operate in Australia, and ASIC enforces a strict level of education and experience amongst the nation’s mortgage brokers. MFAA or FBAA memberships show that the broker in question follows high standards in regard to legal requirements and that they offer thorough transparency in everything they do.
The number and quality of lenders on the panel of one mortgage broker is not the same as another’s, so you will need to look into this. When you have narrowed your choice down to a few mortgage brokers, you can use feedback and online reviews from previous customers to make a decision.
Pros and cons of using a mortgage broker for refinancing
- Save time and money. Given that your broker does all the groundwork for you, you don’t have to worry about carrying out extensive and time-consuming research to find the right refinancing deal for you. A broker can draw upon their panel of lenders and products to find one that will suit your financial and lifestyle goals.
- Access competitive deals. Your mortgage broker can also help you find deals you wouldn’t be aware of otherwise, which can lead to big savings over the life of your loan. As a broker has r
- Insider knowledge. Brokers know which lenders are likely to approve your application after taking your circumstances into account. This is particularly important if you have specific borrowing needs such as if you're receiving Centrelink benefits or if you have bad credit. This can help you determine which lender will be most likely to review your application.
- You don't have to pay. The fact that you don’t have to pay for a broker’s services means you can benefit from their expert knowledge without having to pay a hefty fee.
- You won't learn as much. There’s a good chance you won’t get to learn as much about the products available on the market, however a good mortgage broker will explain how the product and features work.
- Conflict of interest. Since mortgage brokers work on commissions they receive from lenders, you need to be wary of any brokers that tend to push products that offer them better commissions. In some cases, a broker may have a conflict of interest if they recommend certain products that offer higher commissions.
Things to remember when using a mortgage broker
Make sure you check for ASIC registration and MFAA or FBAA membership at the very onset, as the absence of these can translate into a lack of professionalism and ethics. Next, don’t hesitate to ask your broker exactly how much he or she stands to receive as commission on any given product.
A good mortgage broker should use technology to find the best deals for you, which normally requires the use of suitable software. Make sure your broker takes the time to explain all the details of your new loan, from interest rates and costs to fees and features. Expect high levels of customer service even if you’re not paying your broker—because someone is.
Refinancing requires you to look for a home loan all over again, so if you want to save some time you should think about using the services of a mortgage broker. A good mortgage broker brings expertise to the table and can also help you save money.