Brokers and Pulse

In the past people who wanted to buy properties in Australia, and needed finance

to do so, would approach the nearest bank for a mortgage home loan or investment loan.

Today, however, the world’s finances are fluctuating more rapidly than ever before. If

you want to keep pace with what is happening and what type of financing transaction is

to your best advantage, you need to compare all the deals on offer.

In the 1980s mortgage brokers began to make an appearance on the property scene

in Australia, and by the 1990s property buyers and sellers, as well as mortgage loan

lenders, began to make increasing use of their services. Since then about a third of all

Australian mortgages for properties have been negotiated by property loan brokers.

Given the current trends and the large variety of mortgage loans on offer, your

best bet is probably to approach a mortgage broker who will act as an intermediary

between you and your mortgage loan lender. Australian property buyers, together with

those of many of the Western countries are finding it increasingly beneficial to work

through a broker. The lending market has become very competitive and it can make a

big difference to your financial future to make the right choice of lenders.

Mortgage brokers tend to keep their fingers on the pulse of the property markets

as well as the financial markets. From day to day they are aware of the changing

dynamics of property, investments and mortgages on offer.

Naturally they need their cut for the valuable services they offer, and this typically

amounts to approximately 0.66% of the loan amount paid up front, as well as about

0.18% per annum. The actual amounts of this commission varies among the different

lenders, and also for different packages.

When you approach a broker, you need to find one who not only goes to the

trouble to select the best package for your present investment and financial needs, but

also looks to the future and the tax and financial impact it will have on you in the long

term.

The good news for you is that this percentage commission is generally paid to the

brokers by the lending organisation that provides your mortgage. You should not be

liable for any charges yourself.

Mortgage brokers are regulated by the Australian Securities and Investments

Commission. It is also desirable that they should be full members of the Mortgage and

Finance Association of Australia and accredited by them. These measures are to ensure

honest practice and compliance with all laws governing finance and lending, and to

protect the interests of the consumer. You will be well advised to select a mortgage

broker who is affiliated to the Mortgage and Finance Association of Australia and

accredited, for your own protection.

It is also required by law that Mortgage Brokers be affiliated to organisations such

as the Credit Ombudsman Service, which is an organisation dedicated to resolving

disputes, should any arise. This is there to protect both parties in the event of unforseen

circumstances.

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