Mortgage Broking 101 - What is a broker and should you use one?

Imagine this…

You want to buy a new car…You’re not sure of how much you want to spend, nor entirely clearly on what type of car you want. You like something big, like a Toyota Rav 4, but you also like the idea of a two-door sports car…But then, you see an ad for a Tesla, and think to yourself, “I can see myself in one of those!”

What do you do…

One option is to walk into the first dealership, have a 1 minute conversation with a car salesman, and point to the first car you see and say “give me this one!”

Is this the smartest option? Do you buy the first car you see from the first car dealership you visit?

No you wouldn’t!

Then, why would you get a loan from the first bank you visit? Why not shop around, see what’s out there…This is where a broker can help you.

What is a broker and why should I use one…?

I’ll keep this short and sweet (I hate it when blogs waffle on).

A broker is someone who (1) identifies your financial needs and goals and (2) conducts research to find out which lender would suit you best. Once knowing this, the broker will look at all possible products offered by that lender, and choose one that will work best for you….

Think of it like this….

You’ve told yourself you want to buy a car. You visit 10 different dealerships and spent hours looking online. After you’ve conducted all this research, you now realise what you want. You say to yourself “okay, I need a 4 door sedan because we need space for the dog and space for when we go camping. Something with decent safety features too, as we plan to take long trips away. I don’t need anything fancy, but I do like the option of a reverse camera as well as a push-start motor. Given my future plans, I have a budget of $25,000, but can extend this to $32,000 if need be…”

This is what brokers do…!

See, this is the research the broker will do on your behalf…We will examine your needs, budget and financial constraints, and find you a loan product that will best meet all these…Leave the research and the banks to us.

Brokers may life easier…We’ll take the guess work out of finance. You wouldn’t buy the first car you see, so don’t “buy” a loan from the first bank you visit…