The recent Mortgage and Finance Association of Australia’s (MFAA) report has revealed mortgage brokers arranged seven out of every ten (69.5%) new residential home loans settled during the first three months of 2022; with brokers accounting for around half (52.1%) of all new loans settled two years ago, this is highest proportion of property buyers using a mortgage broker ever.

When we translate this into dollars, during the March 2022 quarter, mortgage brokers settled loans to a total value of $88.10 billion. This is the highest value of new settlements observed for a March quarter and represents a 41.54% year-on-year increase on the $62.25 billion settled in the same quarter in 2021.

So why are more borrowers turning to a mortgage broker?

Part of the reason is the best interest legislation; this means mortgage brokers must always act in the best interests of consumers, ie. you – not the other way round.

But property buyers are increasingly turning to mortgage brokers for other reasons too:

• Expertise and knowledge

Mortgage brokers do have to undergo intense training, and many use a broker because of their knowledge and expertise.

Mortgage Choice’s recent survey found four in five (83%) borrowers were motivated to use a broker because they have the expertise needed to find the right home loan. And for those under the age of 35, one-third (35%), felt guidance through the home purchasing process was one of the most important roles of a broker.

• They do the legwork

Brokers save you time by doing the research legwork for you; they have access to loans from many different lenders, meaning you don’t have to contact several lenders and keep giving out the same information several times.

• More choice

With more offers on the table, some from lenders who only operate through brokers, the chances are you’ll find a loan that really suits your financial circumstances and goals.

• Unusual financial circumstances

Because brokers have existing relationships with their lenders, they can often help people find a mortgage when they don’t quite tick all the boxes.

For example, if the borrower is self-employed, has a poor credit history or is over 65 years old.

Brokers also can negotiate if they feel lenders are not being reasonable. The Mortgage Choice survey found more than half of the survey respondents (53%) who identified as owning three or more properties said they saw a great benefit in using a broker to assist with complex loans, and two in three (68%) borrowers over the age of 65 listed securing a loan as one of their motivations for using a broker.

• Adding value

Even if the borrower has straightforward financial circumstances, they will still benefit from using a broker.

Brokers don’t have the advantage of being employed by a lender and many rely on retaining customers for repeat business, and word-of-mouth to get new customers; as a result, brokers will often go above and beyond in their customer service, taking on the administration and communications with agents and conveyancers so there is less stress for the borrower.

In doing so, customers come back when they are looking to remortgage, and these customers refer them to other people.

Indeed, the Mortgage Choice survey found 71 per cent of borrowers were motivated to use a broker because they delivered value.

Selecting a broker

When selecting a mortgage broker, always make sure they have the correct qualifications and accreditation. The main industry requirement to become a mortgage broker or credit adviser is a Certificate IV in Finance and Mortgage Broking. Even experienced brokers are required to have the Certificate IV in Finance and Mortgage Broking under ASIC requirements for credit licencing, MFAA guidelines, FBAA guidelines and to become accredited with lenders. Some brokers have other qualifications such as degrees in finance, economics or accounting.

Once you’re sorted with your mortgage and bought your investment property, get in touch with us to see how our property management services can make your life easier and free you up to do more of the things you want to do.

We’ve helped thousands of people realise their financial dreams through property, and we’re always looking at ways for you to get the best from your investment.

Simply give us a ring on 02 4954 8833, send us an email to mail@apnewcastle.com.au or drop into our Cardiff office for a chat.