A mortgage broker is the middle man of home loans. They’ll liaise with a lender on your behalf, help you negotiate a better deal and follow your application from start to finish. They’ll also simplify the home loan process and make it less overwhelming.
In most cases, the mortgage broker is paid a commission for arranging your home loan application. This commission is paid by the lender which you decide on. In most cases, the mortgage broker is not paid at the time of the application, only once your application is approved.
Commissions differ depending on the lender. Some lenders pay higher commissions, and in some cases this may encourage a broker to recommend a particular home loan product. For this reason, it’s important to ask a mortgage broker about their commissions when comparing home loan products.
It is also important to ask a mortgage broker about their service charges. In some cases, a broker will charge you an upfront fee for their service. This fee is in addition to the commission that they will receive from a lender.
Mortgage broker commissions are typically paid on a month–to–month basis over the term of your home loan. The fee paid is usually a percentage of the total home loan value you take out with the lender.
If you decide to use a mortgage broker’s service, make sure you ask them about the commissions they receive. If possible, ask the broker to include the commissions in the home loan product comparisons that they offer you.
This will ensure that the mortgage broker is offering you objective information based on what is best for your finances, not theirs.
Here’s what to know:
- Shop around and compare fees and services before you use a mortgage broker.
- Ask about commissions and if they charge you a fee.
- Ask about the range of home loan products available to them and how many lenders they have on their panel. A good mortgage broker will have a vast selection of home loan products and lenders, whereas a new, less experienced mortgage broker will have a smaller network.
Are you ready to meet with a broker? Then contact eChoice and speak to lenders with access to hundreds of products. We have helped many Australians like you secure a mortgage.