The home loan journey: A broker’s perspective

By Grace Ormsby

September 18 2019
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After ASIC’s recent reporting on the differences between the types of people using brokers for home loans and those going straight to the lender, nestegg spoke with a broker to see if their experience as a home loan intermediary reflects this.

Mortgage Choice in Ormeau’s Deslie Taylor has acknowledged that in her experience, and for other brokers too, they’d “be silly thinking that the general public understands what the home loan interest rate means and what the cash rate is as opposed to what their rate is”.

“The importance of my role, I feel, is to be here to educate the clients and help them make an informed decision moving forward in regard to either their first home purchase, refinancing, consolidation, upgrading [and] investing,” the award-winning broker said.

“I’m here to help them make those financial decisions and feel like they are able to make those financial decisions with an educated outlook as opposed to going in there blind and sort of feeling their way around.”

Compared to ASIC’s findings, which considered consumers choosing mortgage brokers as more likely to be first home buyers, younger and have lower incomes, Ms Taylor said her clientele is “basically your mums and dads who are upgrading [or] refinancing… they then tend to become investors”.

“They are then referring their children who are first home buyers, who then become upgraders,” she continued, with clients that “tend to be clients for life”.

“It’s our job to educate them and to really allow them to grow, [and] build their retirement wealth in an educated way.”

Ms Taylor said she begins her client journey by considering what a client is looking for in a product: “What they are looking to achieve with their loan.”

“If they want fixed... if they want variable. If they do want variable, what do they want out of that variable — do they want offset? Do they not want offset?”

Once the broker has determined the product that the clients really want and that will also suit their financial needs, she said that from then, they are “able to fine-tune [a product type] for them and do all the leg work and give them comparisons of the lenders that have those best products that will suit them”.

“From there, we might give them a choice of six products with six lenders, and then we can show them, right — this lender has an establishment fee, that lender doesn’t, this lender has an account keeping fee, that lender doesn’t, this lender’s mortgage insurance is actually higher than that lender’s, because the mortgage insurance depending on the lender and depending on the deposit is higher,” she outlined.

If you go straight to a normal bank, Ms Taylor said, “they are going to give you one option and that’s their option”.

“Whereas with a broker, we can show them a multitude of options and, obviously, not only that, it’s a credit perspective,” the broker clarified.

“Because at the end of the day, just because you like a lender’s product and you like a lender, doesn’t mean that your personal financial situation is going to suit that lender [and] doesn’t mean that credit is going to approve your loan depending on your position.”

She gave the example of being in a casual role, where some lenders want you to be casual for six or 12 months, while other lenders are happy for you to be casual for three months.

Another example the broker provided was that while some lenders want to see genuine savings, other lenders may be happy to see rental statements.

“Ultimately, the lender’s credit policy also determines whether or not you could go there.”

As a broker, Ms Taylor said, she’s able to say, “‘Look, that lender has got a great rate. However, unfortunately, due to your personal situation, you don’t fit that credit policy’, so we don’t waste time even looking at that lender.

“Whereas if they were to go [straight] to that lender, it’s not until the lender gets deeper into it that they kind of might have this rejection that will come through.

“There’s a level of time wasting that’s involved there.”

All in all, Ms Taylor said in her role, she’s here “to educate people just make a better life for themselves”.

“And by doing that, whether it’s by helping them consolidate their consumer debt into a personal loan, or helping them refinance their home loan into a better interest rate, it’s about making everything financially better to give them a better life.”

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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