Benefits of Using a Mortgage Broker to Refinance

September 5, 2018


When you use a mortgage broker to refinance, you could gain a huge advantage. An experienced broker will be able to help you find the right lenders for you. Finding the perfect fit isn’t just about applying for a competitive loan product with the interest rate and features on your wish list. It’s also about qualifying at all. Your mortgage broker will be able to let you know what loan products may be available to you when you refinance based on your profile as a borrower.

Essentially, a good mortgage broker could make or break your refinancing experience.

A mortgage broker’s purpose is to use their experience and knowledge of the market, and of your unique financial situation and refinancing needs, to help you determine the most competitive options for you. A good fit’ loan is really satisfying. It could mean huge savings, lower repayments and the ability to meet your unique financial goals. If you aren’t confident that you can make your loan work for you when you refinance, you may want to consider using a mortgage broker to refinance.

Mortgage Brokers Are Connected to a Variety of Lenders

When you work with a broker, they are able to take an objective look at your individual needs and financial situation to help match you with the right loan options. This is because they are not connected with any one bank. A broker works with many different banks and non-bank lenders. This gives you access to a huge pool of home loan products.

Having more options can be critical when you are a non-traditional borrower. If you are self-employed and refinancing, have bad credit, or are interested in a more complex financial product like an SMSF loan, you’ll benefit from having all the options your broker can provide – and explain to you – at your fingertips.

Brokers Will Always Know More Than You

When you search for home loans, the more you dig, the more you realise there is to know. Even when you work with a broker, it’s still important that you do your own research, comparing rates, features, lending policies and fees. But, a broker will also know the nuances of different lenders and loan products because they work with mortgages on a daily basis.

They may also have access to options that aren’t available on the retail market. Your broker will always have more insight to offer you. And the more knowledge you are armed with, the smarter refinancing choices you can make.

Smart tip: make sure you don’t hold back when it comes to letting your broker know your goals as well as the specifics of your income, asset ratios, and credit history. The more they know, the more equipped they are to fit you with the right loan for your needs.

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You Can Skip Some of Your Refinancing Paperwork

This is a bonus a lot of homeowners don’t realise. When you use a mortgage broker to refinance, the broker will take care of a lot of your paperwork for you. This can take a lot of stress out of the refinancing process. Not only will they manage your legal work, the application, the settlement process, and more, but you can have confidence that everything is done properly because a professional is handling it.

Refinancing Without a Mortgage Broker

The fact is, a lot of Australian homeowners are using mortgage brokers for refinancing and for first-time loans. Millennials, in particular, are increasingly turning to brokers for help. Recent research by Roy Morgan found that 42.5% of millennials opt for a mortgage broker.

That still means more than half of borrowers aren’t using a broker. What happens if you choose to refinance without a mortgage broker?

Without a broker, you will need to compare lenders and try to find a loan product that suits what you want out of a loan for yourself. You’ll want to look at things like the interest rate, loan features, loan type, how flexible the lender is, and any special deals.

Also, if you have concerns about being stuck paying Lender’s Mortgage Insurance when you refinance or aren’t sure what your options may be, a broker may be able to help you walk away with a more competitive loan than you could have managed on your own.

Mortgage Brokers Can Make Refinancing Easier

You’ll have to research, prepare documents, evaluate your finances, and more when you go to refinance your home loan. A lot weighs on your choice.

For example, if you choose to refinance with a bank that has a strict lending policy – and are declined – you’re going to have to start over. Having your loan application declined can be demoralising!

Overlook a key feature or make a common borrower mistake and you could end up spending a lot more money than you planned on when you refinance.

Having an objective, knowledgeable expert on your side can make a huge difference. You’re more likely to get a great loan and to have a positive experience. The best part is, you don’t have to pay anything for a broker’s professional guidance. Mortgage brokers work on commission and are paid by the lenders, not the borrowers.

If you do decide to work with a mortgage broker when you refinance, make sure you compare your options, just like you would when shopping for a lender. Look for mortgage brokers with experience. You can check and make sure they are a member of either the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). Also, look at your broker’s commission structure so you understand how they are compensated for connecting you with a lender.

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