Why not an online mortgage broker?

Hi everyone

The Banking Royal Commission is attracting much comment as it progresses.  This article by well-known finance commentator Peter Switzer caught my eye, as it puts some perspective back into the role of mortgage brokers.  The key paragraphs are…

“On mortgage brokers, my experience with these people is that they have made it easy for borrowers to get loans at lower interest rates than what many of us could get from a bank. Their existence and their general efforts to get their clients the best rate have made banks more competitive on rates.
Let’s face it, all professions and industries have bad people — even lawyers can be dodgy over-chargers — but most mortgage brokers have done a great job and I don’t care if they get commissions if they put me into a 3.8% loan rather than a 4.5% loan my bank might offer me.
Most of us hate banks, especially when they say no to a loan, and mortgage brokers have helped customers not only get lower interest rates but also have found people who would say yes to our requests for loans.”

As a mortgage broker, I see numerous clients who have tried online brokers before they come to me.  There are a number of key lessons…

  • Many online brokers are aligned with specific banks and do not provide a service across a wide variety of banks and products
  • I don’t apply for a loan on behalf of a client unless I am pretty sure it will be approved.  Clients who apply direct and are not approved will incur a strike on their credit file.  Just as a last phone bill payment or missed credit card payment does.  This is a crucial factor is being able to access future finance
  • My network with the business development managers across over 30 financial institutions means I have the conversation first to work out whether approval is likely prior to a formal application

Here is the full article if you are interested

Please let me know if you have any questions or would like to discuss other aspects of the mortgage broker debate.

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