Can you be your own mortgage broker?

Any Australian who thoroughly researches the home loan market and carefully compares mortgage offers could enjoy similar results to visiting a mortgage broker. While there may be some advantages to being your own broker, there are also potential benefits from having a broker in your corner.

Professional mortgage brokers may not be able to be their own brokers in some cases. Some banks don’t allow brokers to self-submit mortgage applications for their own personal use, where the broker is the applicant or one of the applicants. This is so the banks can maintain their regulatory requirements and responsible lending commitments.

What do mortgage brokers do?

Mortgage brokers are home loan experts who can recommend mortgage deals that may best suit your financial situation. They can negotiate with lenders to help you get a lower interest rate or access to other features and benefits that may suit your financial situation, And brokers can manage the home loan application process on your behalf, taking care of much of the paperwork so that you don’t have to.

But researching the mortgage market, understanding your own financial circumstances, and familiarising yourself with the home loan application process could effectively allow you to act as your own mortgage broker, and handle every step of your home loan application, from inquiry to settlement. 

What are the benefits to being your own broker?

Choose from more lenders

Most mortgage brokers in Australia don’t compare every home loan option on the market when working out the best options for you. Instead, they compare options from a select portfolio of lenders. While these lenders often offer a wide range of home loan options, there will almost always be more options out there that could be worth considering.

By doing your own research, you may be able to find home loan offers from smaller banks, non-bank lenders, and other providers with rates, fees, features and benefits that suit your needs. Some of these lenders may not appear in a broker’s portfolio, so you may be able to choose from a wider variety of options by going it alone.

Avoid potential conflicts of interest

Brokers are paid commissions by banks when they refer new customers to them. While mortgage brokers are obliged to act in the best interest of their customers, it’s possible that a broker could recommend a lender based not on the benefits of their mortgages, but how much they’d pay the broker. 

Not all brokers are created equal

Just as it's important to research and compare mortgage lenders, it’s also important to research and compare mortgage brokers. While brokers are expected to maintain certain professional standards, not all brokers offer the same levels of education and experience, and not all will offer the same home loan options. 

What are the benefits of using a mortgage broker?

Access to exclusive deals 

Mortgage brokers often have a different level of access to banks and mortgage lenders than everyday customers. In some cases, this may include knowledge of special home loan deals that the banks don’t typically advertise, which may be exclusive to mortgage brokers. In some cases, these deals may be ideal for your financial situation

Expert knowledge for unusual situations

If your financial situation is relatively straightforward, you may be able to handle applying for a home loan or refinancing a mortgage largely on your own. But if your situation is a bit unusual, you may run into issues that could hold up your mortgage application or see it declined.

For example, you may be self-employed or a contractor, and aren’t able to prove your income using payslips. You may have a bad credit history, or may be looking to buy a property with a small deposit. Some professionals may also have specialist needs from a home loan, such as structuring the mortgage to help protect your assets, and may be eligible for extra features and benefits that you may not be aware of.

Mortgage brokers can use their expertise and specialist knowledge of individual lender requirements to help you find a mortgage that will match your unique financial position. This can help to save you time and effort on research and making unsuccessful applications, and may let you benefit from more useful home loan features.

Free to use

Because most mortgage brokers in Australia are paid commissions by banks rather than charging fees to customers, it usually doesn’t cost you anything to visit a mortgage broker. A few brokers charge fees to their customers rather than taking commissions, but these are the exception to the rule.

Brokers are paid by banks but work for customers. While the previously-mentioned risk of conflicts of interest remains, brokers are obliged to act in the best interest of their clients. A broker may be paid the same commission from a bank even if they negotiate a discount for you, so it may be in the broker’s interest to get you the best possible deal for your circumstances. 

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