Common Sense Finance breaks down the role of mortgage brokers

Common Sense Finance breaks down the role of mortgage brokers

IF you aren’t finance savvy, borrowing money from loan sharks to purchase a home or investment property might seem quite scary.

Thankfully, there are mortgage brokers like David Williams from Common Sense Finance in East Perth to help.

What does a mortgage broker do?

Mortgage Brokers have a clear vested interest to work for the client.

We provide an unbiased view and operate under specific rules, regulations and legislation.

We do all the legwork and research thus saving client’s time and money, and the hassles of liaising with so many interested parties.

Our job is to guide our clients to have a better understanding of the market dynamics, idiosyncrasies and lending cultures and ultimately assist a client in wealth creation and desired standard of living.

How can a mortgage broker help a first-home buyer enter the property market?

Education is key – we help a client understand the availability of options in the market and discuss the pros and cons inherent in each option.

We also discuss opportunity cost, common mistakes made by first-home buyers and the availability of avenue for dispute resolution.

It is also important to explain the importance of research, financial and legal opinion in relation to contractual obligations and caveat emptor.

How can a mortgage broker assist in purchasing an investment property?

A truly amazing mortgage broker embraces empathy and philosophy of life in client engagement.

We work with the client’s financial planner/accountant and assist in obtaining loans.

Aspiring property investors should have a good and trusted team of finance broker, financial planner, accountant, lawyer, etc. in place before committing to any property purchase.

Who pays for your services?

Lenders pay the commission, however, mortgage brokers can charge a fee depending on the complexity of the case.

Regardless of whether an applicant uses a mortgage broker or not, he or she will pay the same interest rate and fees according to the lender’s policy.

The Mortgage and Finance Association of Australia

The Mortgage and Finance Association of Australia (MFAA) represents 12,900 brokers, each of whom is only responsible to their customers.

MFAA CEO Mike Felton said brokers provided a critical service to consumers that combine choice, expertise and convenience and help them make informed choices and get the most appropriate deal.

“Brokers write more than 53 percent of all mortgages in Australia,’’ he said.

“The industry grew by four percent in 2016, and 92 per cent of consumers reported they were ‘satisfied’ or ‘very satisfied’ with their broker’s performance, according to a 2015 Ernst & Young study.

“When you are obtaining a mortgage, there is a lot more at stake than just the interest rate. Brokers assess the needs of their customers in detail, both now and into the future, and recommend products and lenders that suit these needs.”

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