The landscape for homebuyers is a very different environment compared to 12 months ago. In these rapidly changing times, it is even different from just 6 months ago.
All of Australia’s capital cities are showing they have passed their peak growth rate, and with increasing rates, inflation, and costs of living, it’s more important than ever to secure your financial future.
To say the residential property market has been booming is an understatement – in fact the total value has passed $10 trillion, a record high.i We are also experiencing the cost of living going up, as you’re no doubt aware of if you tried to buy iceberg lettuce for under $10! With inflation sitting high at 7.8 per cent in the December 2022 quarter, this also directly impacts purchasing decisions.
The rise in demand for brokers
The current landscape has seen more Aussies turning to mortgage brokers for help in securing finance to enter the competitive property market.
Recently the Mortgage & Finance Association of Australia (MFAA) reported that in the March 2022 quarter, mortgage brokers facilitated 69.5 per cent of all new residential home loans.ii This is an increase on the 57.5 per cent reached in March 2021 and the 52.1 per cent from March 2020.
The findings also showed that mortgage brokers settled loans to a total value of $88.10 billion – the highest value of new settlements ever observed in a March quarter. It is a marked increase on what was achieved in the previous March quarter, which was $62.25 billion.
So why go to a mortgage broker rather than a bank directly? Here are just some of the reasons why consulting with a mortgage broker is a wise choice, whether you are a first home buyer, wanting to upsize or downsize, or invest.
Providing more choice
When you meet with a mortgage broker, you’ll be able to learn about and choose from a wider range of lending options and loans. This is particularly important now, given that rates are on the rise. You want to ensure that you are getting the best possible deal for your current circumstances, keeping your future financial goals in mind.
We can explain the ins and outs of different loans so that you can select the best option for you – one which you may not have known about. We have access to numerous loans from a panel of lenders so we can compare and find the one which will suit your specific needs.
Navigating complex circumstances
Brokers can assist you in navigating complex circumstances and overcoming common barriers such as having a poor credit history. The average credit score varies by age and gender, with males over 60 having the highest, while females between the ages of 21 and 30 have the lowest average credit score.iii
For young buyers, a non-existent credit score (due to not having a credit card or not having previously taken out a loan) can also pose an issue. Irregular employment history – with periods between jobs or constant job changes – is another red flag which makes it difficult to get a loan.
Having a complex portfolio is another reason people seek out a mortgage broker, as we can provide guidance on how to save on interest rates if you have multiple properties, for example. We can think outside the box to come up with creative solutions that will provide you with the best outcome.
Mortgage broker market share reaches all-time high
Source: MFAA’s quarterly survey of leading mortgage brokers and aggregators January – March 2022
Adding value
Brokers are not just helpful in assisting with complex cases. We also add value for those requiring straight forward loans. Not only do we have access to a wide variety of deals, but our knowledge can also help guide you in securing finance as we act as the go-between from the bank to our client.
We also take care of a lot of your admin, making the process less time-consuming for you. We do the chasing up for you and relieve you of a lot of the paperwork during the application stage. You won’t have to wait on the phone listening to the bank’s hold music or struggle to get a human to answer your questions. This will not only save you time and effort (and reduce frustration), but you are likely to also save money in the long run.
Establishing an ongoing relationship
The relationship between broker and client is ongoing, which allows for a continuity of care and support. From initially purchasing your property, we can provide guidance over the lifetime of your existing loan as well as assist with future finance.
As your circumstances change – and as the environment changes as we have seen this year – a broker can help ensure your home loan is not only at a great rate but structured to suit your current and future needs.
Now is a fantastic time to get in touch to hear how we can help you ride the wave of Australia’s property boom and for advice on how to deal with its challenges, such as rising interest rates. Whatever your goal is, we can get you on your way – call us on (02) 8277 4605.
ii https://www.mfaa.com.au/news/mortgage-broker-market-share-breaks-records-again
