Around 60 per cent of Australians use mortgage brokers to purchase property. These borrowers are learning that they are often better off getting a mortgage expert to source their loan than just going into any-old bank branch.
According to research from Ernst and Young, borrowers who used brokers to arrange their loans did so because they perceived:
- It is more convenient
- Offers better rates
- Provides more options
When I read this research, it made me ask what are the things that I have done for a client that they would not have had from a bank branch? So, here are some (amusing) examples – I know that other good brokers have done something similar.
- Visited a client in their hospital bed just after a routine operation so they could sign some loan documents
- Stayed overnight in Melbourne and harangued a branch manager until a loan settled on time
- Met at a McDonalds at 9.00pm
- Almost flew my wife to China with some loan documents so that they could be signed in time
- Opened an investment property for a valuer (because the client lived interstate)
- Spent two hours on the phone from a Paris hotel to get a Canberra loan organised
In most cases brokers only get paid a commission; which means that, if the loan does not settle, they do not get paid. So, in general, brokers are hungrier to look after borrowers.
When you search for a broker, you may want to interview her first so that you get a feel for how well she will look after you.
But it’s not just about hunger, borrowers also need to have confidence in the broker’s ethics.
By law brokers must declare how much commission they will receive for arranging a loan – but there is no harm in asking how much commission they would get from a different lender. While brokers may offer you better rates or convenience, you also have to be able to trust them.