One in five Australians do not know what a mortgage broker does, with some believing they “are like stockbrokers” or are actually non-bank lenders, according to a recent survey.
The research¹, commissioned by Bankwest and the Mortgage and Finance Association of Australia (MFAA), asked respondents across the country a number of questions related to mortgage brokers and the service they provide.
It showed that many Australians are unaware of that mortgage brokers are actually an intermediary between the borrower and the lender (usually a bank), who negotiates the loan on their behalf.
They will do the legwork on researching products on the market from the hundreds available, and then support the borrower through the application and settlement process. They generally charge the borrower nothing for their service, as brokers are remunerated by the lender when the mortgage is settled.
Aussie’s state manager for Queensland Tim Amourous believes there are benefits to using a broker, particularly through the application process.
“Lending criteria has tightened due to the aftermath of the Global Financial Crisis. Banks are rejecting customers for sometimes minor,” he said.
“All banks have different guidelines, and unless you’re familiar with them you can find yourself not getting a loan – just because you haven’t crossed a ‘t’ or dotted an ‘i’.”
Mr Amourous said it was worthwhile establishing a relationship with a mortgage broker, as they will be with you for years. “As your financial circumstances can evolve over time, so do products and services,” he said. “You may want to fix part of your loan, refinance or perhaps buy an investment property. Forging a relationship with a mortgage broker can make all of those decisions much easier.”
But for the Australians who had used a mortgage broker, they were thrilled with the service and would use a broker again, whether to buy an investment property or refinance. The Bankwest/MFAA survey revealed mortgage brokers are beating the banks in overall customer satisfaction results.
One of the online survey respondents of the online survey, a 27-year-old male from WA, said he had used a mortgage broker because: «They provide one central point for mortgage information. I also like the convenience of dealing with only one party during the purchase process.»
Another respondent, a 30-year-old female from WA wrote: «My broker had a good supply of information, choice of product from a variety of lenders, someone to talk you through the process.»
Bankwest’s head of broker sales Aaron Milburn said the result was a true testament to the broker offering.
“This is a great result and we look forward to working closely with brokers to keep them at the forefront of buyers’ minds,” Mr Milburn said.
“Interestingly, the research shows it’s the 30 to 39 year olds who will most likely use a broker, with just over a third (38.8 per cent) saying they’d go straight to a professional when seeking out home loans.”
MFAA chief executive officer Phil Naylor said the results showed mortgage brokers had begun to differentiate themselves and their services from the banks and non-bank lenders.
“Whilst the majority of consumers are still selecting banks as their preferred loan source, there is visible improvement in the broker market. The challenge for brokers is to continue offering services desired by consumers and delivering these with professionalism,” Mr Naylor said.