It’s so easy to head into the local branch of your bank and ask for a loan. You’ll sit down with one of the lender’s staff and they’ll outline how much you can borrow, what products are available to you, and draw up the paperwork.
So why would borrowers ever have a need for a mortgage broker? If you’re like me, you might get asked this question frequently. And because I’m often asked, I’m well equipped to provide the answers. In fact, I think as mortgage brokers it’s our duty to educate people on why they should consider all their options when it comes to obtaining finance.
Many borrowers believe their bank has all their information and knows all their financial details, so they’re in the best position provide what they need. But are they really? Will banks that are approached directly really provide borrowers with the optimum product for their particular needs?
In some cases, yes. But in many cases they won’t. If borrowers simply go into a bank and ask for finance the bank will assume the customer is dealing with them and then won’t offer the best available interest rate, for starters, simply because they don’t have to win the customer’s business – they’ve already got it.
However, if borrowers go through mortgage brokers the banks will know they’re up against other lenders and they’ll put their best foot forward, offering the best deal for the customer. And this is the key factor that makes mortgage brokers so valuable.
A mortgage broker’s role is to source the best loan for the borrower. They are in a position where they can find the best deal for their customers – for instance, we have 25-plus lenders on our panel that we can compare and this usually ends up with the client finding a better deal than that offered by their local bank.
Can you imagine how time consuming it would be for a borrower to work out the difference between 20 or 30 different loan products on their own? It wouldn’t be an easy task!
That’s why mortgage planners get paid for what they do. They invest their time staying up to date with the latest loan products, ensuring borrowers are always given the best loan available for their particular circumstances.
Essentially mortgage brokers can do the shopping around for borrowers, and this is extremely important particularly now, when we’re seeing some of the best ever rates available from lenders due to a historically low cash rate and intense competition.
Likewise, with credit reporting now having been implemented, it’s even more important for borrowers to let someone else do their shopping around for them. The more credit enquiries borrowers do, the worse their credit history will appear to lenders, and this will make it harder for them to get finance.
Indeed, I’m already noticing that more and more people are seeking the services of a mortgage broker, and I believe this will increase only further in the future, with one potential impact being a move away from the big four lenders. It’s often the case that the smaller lenders have more competitive packages on offer, and if that’s the case, we will increasingly move our customers in this direction.
Having said that, borrowers shouldn’t base their decisions simply on the fact that an interest rate is cheap, and this is yet another reason for them to use a mortgage broker.
Borrowers should be looking for loans that will give them the flexibility they require and that will work for them in years to come. Even though a lower interest rate might be appealing, if the loan is not set up in the correct structure or there are hidden fees and charges, it may actually cost more in the long run.
Mortgage brokers can assess each individual’s situation and determine what product suits them best. In contrast, individual lenders can only offer their own products – they won’t tell you if another bank has an even better product for you.
Ruan Burger, managing director, TIME Home Loans
Ruan Burger has been in the mortgage broking business for nearly a decade, starting out in the booming town of Gladstone after working in the banking industry for many years. He formed Time Home Loans early in 2013 after moving to Brisbane and the business has grown significantly since then.
Ruan is a nationally recognised member of the MFAA. During his career as a mortgage broker, Ruan has won – and been a finalist in – several awards. He won the MFAA Mortgage Broker of the Year award in 2012 and 2013 as well as the MFAA’s Award of Distinction in 2012 and was a finalist for the MFAA’s Credit Adviser award in 2014.
Ruan believes it is his ‘love of the game’, his strategic alliances and colleague morale that promotes his business as a leader in the field.
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