The best mortgage broker will work with you to achieve your finance goals. Whether it's buying your first property, upgrading to your dream home, investing in a rental property to grow your wealth or even buying in partnership with someone else, a mortgage broker can help you get access to the finance you need.
A really good broker will be easily contactable, approachable and proactive about keeping you updated. They may even be able to help you get finance approval after your bank has previously rejected your loan. A great broker can also help you get a loan when the situation is a little more complicated.
This was exactly the case that Sydney-based mortgage broker Aaron Christie-David, finance broker and managing broker of Atelier Finance, helped with in the lead-up to Christmas 2020. Learn how he helped his client achieve their property dreams in a matter of days!
How a mortgage broker got a home loan approved in just 4 days
"We were referred by an existing client to a young family living in the inner west of Sydney. They'd outgrown their current townhouse and were looking for a freestanding home in the Southern Highlands; being professionals who could work from home and possibly commute back into Sydney if required, they were excited at the chance of a scenery change.
They wanted to turn their current townhouse into an investment property because it has great growth potential and strong cash flow. They'd found their dream home, but when they approached their current bank for pre-approval, they were told there was a backlog and the wait time could be two to four weeks.
As they were working with a buyer's agent, they had done a lot of pre-work, meaning they'd had the contract of sale reviewed, arranged a building and pest report and were ready to make an offer. The only thing stopping them from moving forward with confidence was pre-approval.
We met with them and assessed their financial position. We discovered they had really strong borrowing capacity and suggested: 'Why don't we approach a lender that has a two-day turnaround time on pre-approval?' It kind of blew their mind that it could happen so quickly.
Given the market was so hot in the lead-up to Christmas, we also worked in tandem with their buyer's agent to offer the seller a four-week settlement. The seller had already committed to another purchase, so this gave the buyer a competitive advantage as the seller loved the quick sale. We knew this property would be in high demand if it went out onto the open market so by doing this, we were able to take the property off the market and avoid them getting into a bidding war with other potential buyers.
They were formally approved within four days, and with loan documents issued and signed digitally, this sped up the entire process. It was ready to settle within three weeks. Needless to say, the clients were over the moon!"
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How is a mortgage broker paid?
A mortgage broker is paid via commission from the bank or lender that approves your loan. This means you don't have to pay any upfront fees or costs, even if the loan doesn't go through for any reason.
As payment for introducing you to it, the lender gives the mortgage broker two types of commissions. The first is an upfront commission when you are approved for a loan and the second is a much smaller trailing commission, which they are paid for every year you still owe money on the loan.
If you decide to refinance your mortgage elsewhere, the broker might have to pay a "clawback commission" to the lender. Mortgage brokers are legally obliged to disclose how much commission they stand to make off your loan and each lender pays a different amount. If you have any questions about the commission your loan will generate for your mortgage broker, feel free to ask them – an experienced and trustworthy broker is transparent and open about the payments they receive, as they know they provide an excellent level of service and expertise to earn that commission.
Find out how mortgage brokers are paid
How does a mortgage broker work?
Mortgage brokers have a legal responsibility to find you a loan that is suitable for your requirements and that you can comfortably afford to repay. A broker will assess your income and financial capacity carefully, before presenting you with a selection of loans from their panel of lenders for you to make the final choice. They take into consideration your needs, budget, income and situation to find the right loan for you.
Make sure you check that your broker is accredited through ASIC, with either an Australian credit licence or as an Australian credit representative. Brokers are also required to be members of an industry association, either the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).
Learn how mortgage brokers work
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