How much you can borrow? What’s the difference between a bank a mortgage broker? Don’t worry, our experts have the answers.

Why should I use a mortgage broker if I can go with a bank?

A mortgage broker has a legal and moral obligation to act in your best interests when recommending a loan solution that matches your needs. A bank does not have this legal obligation, and can only recommend products from their own product suite. This means that if you go to a bank directly, you may not – 

  • be offered the best rate available
  • be able to borrow as much as you need, and won’t know if another lender would lend you more
  • know whether the structure and type of loans best fit your needs now, and positions you well for future goals
  • be offered product features such as redraw or an offset account, that can save you a lot of interest over the life of the loan
  • be approved because that lender may have already too many properties in that development, yet other lenders would be happy to
  • be provided with a review to make sure your interest rate remains competitive during the life of the loan.

A mortgage broker can do all these things for you!

Who sets interest rates?

Ultimately each lender sets the interest rates for each of its loan products. This is based on a range of factors, which would include their cost of obtaining the funds to lend to customers, their assessment of the risk of loss from loans not being paid back, and of course their profit targets.

The cost of funds for a lender is in turn impacted by a range of factors and controls in the economy, such as the Reserve Bank of Australia determining the official cash rate.

Mortgage brokers do not set rates, however are often in a position to obtain discounts from the rates that the lenders do advertise, due to their knowledge across a wide range of similar products across the market.

Which lenders do you deal with?

We deal with over 30 different lenders. These include major banks, state and regional based lenders, credit unions and specialist lenders.

I am not in your area, can we still work together?

We certainly can! As much as we love seeing our clients come to our office in Griffith, we also work with many clients from all over Australia. Our systems and processes allow us to manage every stage of the loan process via video meetings, email and phone.

Should I choose a fixed or variable interest rate?

This choice should be made after considering a range of factors such as your own plans with the loan and the property, the importance of a stable repayment amount for a period of time, the gap between the fixed and variable options, and the current economic climate. We can’t give you advice on the where interest rates will move, however will provide some guidance around the things you need to consider when making your decision, and can show you the impact on payments in each case.

We can also provide you with solutions that allow you to split your loan, with some fixed with a guaranteed repayment for the fixed period, and some variable, allowing you to pay it down quickly, and draw some back in need.

How much can I borrow?

Your maximum borrowing amount is determined by a number of factors, including they type and amount of your income, your current liabilities and other commitments, the number of dependents you have, and your savings and spending activity. Lenders set their own parameters within regulatory guidelines, and there can be quite a variance from one to the next. 

Give us a call and we can go into your options in more detail, or check out the loan calculator page of our site.

Isn’t it more expensive to use a broker?

No it isn’t. The rates and fees of the loan are the same as they would be if you obtained the loan same directly from the bank. Quite often, a broker can obtain a discount from the lender rate offered, by  negotiating with the other lender offers available.

In many cases it is cheaper to use a broker than go to a bank. The broker has access to many different lenders, and may find a lower priced loan with the same features to match your needs. Brokers are often able to obtain a discount off the rate advertised by the bank, by presenting alternative options they have from other lenders.

Some Brokers charge a fee for their service which they must disclose to you up-front before you engage their services.

Don’t You Just Recommend The Lender Who Pays You the Most Commission?

This is definitely not the case. We carry a best interest duty under the law to put the client’s interest first, before our own. In any case, there is very little difference in the commission paid from one lender to the next. When we present a range of lender options, the commission payable from each is clearly displayed in the documents we provide to you. Our business is built on clients returning, and referring their friends and family. We know that always providing the best solution and advice for the client will see our business grow far more than by looking for the highest commission on one loan.

Do You Charge Fees For Home And Investment Loans?

At My Lending Specialist we don’t charge a fee to arrange a home or investment loan. Once the loan is settled we are paid a commission by the lender. There may be rare cases where we may need to charge fee to compensate where no commission is being paid, or there was a considerable level of complexity. If this was the case we will advise you in advance, and require your agreement to proceed.

What Does a Mortgage Broker Do?

A mortgage broker is a qualified finance professional. They work with you to understand your plans, such as buying a home, then provide you with a choice of finance solutions that best match your situation. This includes analysis of the funding required to complete the purchase, and how much you can borrow.to fund those plans determine your finance needs and work out how much you can borrow. 

Mortgage brokers have access to a wide range of lenders, avoiding the need for you to do all your own research to find the best options. They also manage the process of applying for the loan, acting on your behalf to progress the loan through to settlement. 

As part of their licensing obligations they carry a ‘best interest duty’. This means they must put the client’s interests first, ahead of their own. Banks do not have this obligation. For this reason alone, it makes good sense to engage a mortgage broker rather than go direct to a bank.

Why settle for one bank when you can have access to them all?

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