We all know that working with a competent mortgage broker can save you a tremendous amount of time that you would otherwise spend tracking down and comparing loans.
But can mortgage brokers really save you money? They certainly can, and in some cases the savings could add up to thousands of dollars. Here are 5 ways it can happen.
#1 – Finding a better interest rate
The obvious way a mortgage broker can save you money is by getting you a cheaper interest rate. Even a small difference can equate to thousands of dollars in interest payments over the course of the loan.
Most brokers will explain however that the interest rate isn’t always everything. For instance, some loans may have features that save you money in the long-term even if the corresponding interest rate isn’t the cheapest one around.
#2 – Avoiding those nasty surprises
Another area where a mortgage broker can save you money is with regard to fees, penalties and any other costly additions that are typically packaged into a loan.
Some loans look good on the surface but they can come with a nasty sting. A broker knows about these potential traps and can steer you well away from them.
#3 – Leveraging their inside knowledge
Mortgage brokers understand what goes on within the large, reinforced walls of Australian lenders. They have inside knowledge about quotas and the (sometimes hidden) motivations of bankers, which they can leverage to your advantage. Knowing which lender to use at which time can really pay off financially.
#4 – More negotiating power
With their regular and direct links to key individuals within lending institutions (some are on a first-name basis), a mortgage broker can often negotiate in ways that you cannot.
This can mean anything from zero fees to discounted interest rates.
Many borrowers think they can negotiate a good deal with their lender, but the reality is that a broker can generally do it better.
#5 – Promoting healthy competition
Another, albeit far less obvious, way that mortgage brokers save borrowers money is by promoting healthy competition in the loan market. They keep lenders honest by constantly shopping around for the best deals.
Given that around half of all loans come from the broking industry, mortgage brokers have probably saved consumers millions of dollars on the whole.