Mortgage brokers act as an intermediary working with a borrower and lender while qualifying the borrower for a mortgage. The broker gathers income, asset and employment documentation, a credit report and other information for assessing the borrower’s ability to secure finance.
The broker will help to determine an appropriate loan amount, loan-to-value ratio and the borrower’s ideal loan type, and then submits the loan to a lender for approval. The broker communicates with all parties during the entire transaction.
Mortgage advice from a mortgage broker may be an invaluable service to you. A mortgage broker will help you to understand the mortgage process and they will endeavour to get you the best mortgage deal. If you choose to use a mortgage broker you’re protected as your mortgage broker has a duty of care to you – they must recommend a suitable mortgage and be able to explain why the mortgage they have chosen is right for you. There is also an awful lot to think about when choosing the right mortgage and a qualified mortgage broker may be able to help.
Mortgage criteria have tightened over the last few years and that is why it is so important to have a mortgage broker on your side who understands it all.
There are three main types of mortgage broker:
- Those who are tied to just one lender
- Those who can recommend mortgages from a panel of lenders
- Those who are completely independent and therefore not tied to any lenders.