There’s plenty of people out there saying you should use a mortgage broker and that going direct to the bank isn’t the way to go. But how come? Isn’t the bank you’ve been with your whole life going to look after you because you’re a loyal customer? Surely that counts for something?

What I’ll say straight off is that you should be looking for a mortgage adviser, rather than a mortgage broker. A broker is transactional. They’ll look after your immediate need only whereas an adviser will do exactly that: they’ll understand your personal situation and tailor their advice to what suits you now, and help you achieve your long-term goals.

Your mortgage adviser is your link to the bank. They act on your behalf and their ultimate purpose is to simplify the borrowing process for you and ensure you get the best possible outcome. Whether you’re buying your first home, an investment property, or looking to restructure/refinance your existing lending, having a mortgage adviser who is on your team makes all the difference. They are the person who is going to take all your documents (eg pay slips, bank statements) and present your mortgage application in the best possible light to give you the greatest chance of obtaining a loan.

Borrowing more

The better your application is presented, the more chance of getting the approval. And for them to present things properly, they need to understand everything.

Could you submit your application to the bank yourself? Sure, you could.

But often you might be able to borrow more if you use a mortgage broker. Why?

Because by understanding your situation in detail, a mortgage adviser will pick up any holes in your application before it gets sent off to the bank.

They also might be able to offer a few insider secrets for you to capitalise on or take advantage of. Essentially, what this means is they understand how the banks work, and how each bank’s policies (which are all unique) can work for, or against you.

For instance, a mortgage broker might take one look at your application and ...

• potentially extend your mortgage terms, so your committed expenses are lower
• consolidate debt, again to reduce committed payments so you can borrow more
• restructure lending to free up equity you may not have thought you had
• cancel your unused credit cards, so banks are more likely to lend
• review your bank accounts to make sure you aren’t missing automatic payments or going into unarranged overdraft. If that’s happening they can get ahead of this and explain it to the bank.
  

Experienced eye

All of these tactics require an experienced eye to figure out whether they will actually make a difference to your mortgage application and ability to get credit. Basically, a mortgage adviser will show you how to get a “yes”.

In addition, when applying for a mortgage, speed is of the essence. Often first-time mortgage applicants will send in incomplete details. This means time wasted going backwards and forwards to the bank.

Sounds simple, but it often happens. This can mean missing out on a property if you don’t get your finance approved on time.

A mortgage adviser pre-empts this by requiring all your documents up front. For instance, they’ll often require:

• 3 months worth of pay slips
• 3 months worth of bank statements
• 6 months worth of credit card statements (for each credit card)
• a copy of your passport
• rough budget of what you spend each month
• full assessment of who you are, what you do, and what you own, how many kids you have, are you self-employed, and do you have personal loans?

Multiple lenders

This seems like a lot, right? And the bank you’ve been with for years already has all that information so why would you go through the pain of collating it all? Well, your current bank might have all that info, but what about if going to another bank is what you need in your situation? A mortgage adviser will collect the information from you once, and use that to go to multiple lenders to obtain the best outcome for you.

In addition, collecting this all up front means the adviser and then the bank can make their assessment earlier in the process, rather than having to chase you up later on.

Finally, a mortgage adviser can help you make decisions on how to structure your mortgage based on your personal situation. They won’t simply give you the off-the-shelf offering that’s available right now. What I mean by that is that the mortgage adviser will advise. That fundamental difference between going direct to the bank or dealing with a mortgage adviser could change your financial future.

Is it worth using a mortgage broker? Yes, provided, of course, you have a good one.