Mortgage broking in Australia has been around for decades but many people still don’t understand what a mortgage broker does and how their service works. Join us for our myth-busting blog series as we address some misconceptions about mortgage brokers.
Despite that approximately 50% of people now use a mortgage broker to get a home loan, there are still many people out there who don’t understand what a mortgage broker does and how they can help you find a good deal on your mortgage.
Today we’ll address if a mortgage broker will force you to refinance your home loan to a new lender.
First, it’s important to point out that a mortgage broker shouldn’t ever make you do anything that you don’t want to do. Their role is to review your financial circumstances and personal goals and check if your home loan’s still right for you. If it’s not, they can find one that better suits your needs at a better rate.
It’s also worth knowing that changing your home loan is becoming increasingly common in today’s competitive mortgage market. In fact, on average hhome-owners change their loan every five years.
Your mortgage broker might find that you’d be better off going with another lender, but they should always present the information and various options for you to consider, so you can then make an informed decision.
If you’re largely happy with your lender and the flexibility and features your home loan gives you, your mortgage broker can negotiate a better rate directly with your lender on your behalf. This means you may avoid the need to refinance and avoid any costs that could be associated with that.
I’ve recently experienced this first hand. My husband has an investment property that was financed through, let’s say, Bank A which is one of the big four. His interest rate is currently 5.2% which I think is quite high in today’s market. We visited an Aussie mortgage broker to find out what other options we had, and by simply calling the lender and leveraging their relationship they were able to bring the interest rate down to 4.9% in just a few minutes.
If your lender won’t come to the party and offer a reduced rate, then perhaps it’s time to consider other options. A mortgage broker can compare hundreds of different loans from various lenders within minutes to help find you a better deal.
Have you used a mortgage broker? Share your experience with us in the comments.
If you found this article useful please share it using the buttons below.