Mortgage Brokers Hobart

Mortgage brokers in Hobart

Choosing a home loan can be time consuming and confusing, but Tasmanians can streamline the process by partnering with a mortgage broker in Hobart.

Tasmania is fast becoming the preferred state for many Australians to call ‘home’. Once the state with slowest population growth, Tassie is now the nation’s second fastest growing state, with population growth especially strong in Hobart.

If you’re buying a home or investment property in the Tasmanian capital, a mortgage broker in Hobart can help you find your ideal home loan.

As Tasmanians learn to live with rising home loan interest rates, it has become especially important to shop around for the home loan best suited to your needs. There is certainly a wide range of home loans to choose from. Canstar’s list of home loan providers extends to over 130 different lenders.

Choice is always a plus for consumers, but if you’re pressed for time, unsure about how to arrange a home loan yourself, or if your circumstances are out of the ordinary, a mortgage broker in Hobart can be a valuable source of home loan expertise.

Mortgage brokers sort through a wide selection of loans to help you identify one that suits your needs.

How does a mortgage broker work?

A mortgage broker acts as a go-between borrowers and lenders. Your broker will first identify your needs and goals, and advise if you are in a position to take out a home loan. From there, the broker will recommend a suitable loan(s) from the range of lenders they work with.

The key point of appeal for many borrowers is that mortgage brokers will do all the leg work on your behalf, helping you complete a loan application, submitting it to the lender and responding to any queries the lender may have regarding your application.

Your mortgage broker may even help you apply for various support schemes such as the First Home Owner Grant Tasmania.

How many lenders can I access through a Hobart mortgage broker?

Mortgage brokers in Hobart, as elsewhere, do not work with every lender in the market. Instead, brokers help you find a home loan from the selection of lenders they partner with – known as their ‘panel’ of lenders.

The number of lenders on a broker’s panel varies widely. The big mortgage broking franchises can have more than 30 different lenders on their panel, with some also offering their own brand of home loans.

Smaller brokers may have as few as 10 lenders on their panel, which can limit the range of lenders and loans you have access to. They may offer a more personalised service, niche advice for specific kinds of borrowers and strong knowledge of the local market.

How much does a mortgage broker in Hobart cost?

The services of a mortgage broker shouldn’t cost you anything. That’s because brokers do not usually charge a direct fee to customers. Instead they are typically paid a commission by the lender you choose when you successfully apply for a home loan.

Mortgage brokers in Hobart, and elsewhere, can receive two types of commission:

Upfront commissions

A broker typically receives an upfront commission from the bank or lender providing the product when you, the borrower, first take out a home loan.

How much the broker receives depends on the lender involved. If a lender pays, say, a 0.5% commission and your mortgage broker signs you up for a $450,000 home loan, your broker would make upfront commission of $2,250.

Remember that you, the borrower, don’t pay this. The commission is paid by the lender.

Trail commissions

Trail commissions are usually smaller than upfront commissions, but are paid out periodically. In some cases, a lender will pay a trail commission to a broker for each year that you stick with the same home loan.

How do I find the best Hobart mortgage broker?

More than 100 mortgage brokers operate in Tasmania so it’s important you find one you feel comfortable to work with.

You can narrow down the search by asking friends, family or work colleagues to see if they have any recommendations of a mortgage broker in your part of Hobart, or elsewhere in Tasmania.

Referrals can be especially helpful if you are looking for a broker with particular experience – for example, working with borrowers who are self-employed or advising borrowers who hope to buy a home with a low deposit.

Online reviews can also be a useful tool to check if a mortgage broker has delivered on their promise of great service.

The federal government’s Moneysmart website says consumers thinking about using a mortgage broker can search for a broker through a professional association.

The Finance Brokers Association of Australia Limited (FBAA) and the Mortgage & Finance Association of Australia (MFAA) both have websites with databases of licensed brokers that you can use to find a mortgage broker in your local area.

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Questions to ask a mortgage broker in Hobart

Canstar has a detailed list of tips on how to find a good mortgage broker. There are a number of key questions you might consider asking to determine if a broker is the right person for the job. You may ask a broker:

Do they hold a licence? Anyone doing business as a mortgage broker in Australia needs to be licensed to give credit advice. Licensed brokers are bound by statutory duties, and foremost among these is a duty to act in the best interests of their clients when recommending loan products. To find out if a broker is licensed, you can enquire with a professional body such as the FBAA or MFAA.

How do their fees and commissions work? Mortgage brokers in Australia typically do not receive upfront payment from clients. Instead, they are paid via commissions and other perks from banks and lenders. You may wish to ask your broker how they are paid, and if certain lenders offer more attractive remuneration than others.

How many lenders do they deal with? There is no hard and fast rule as to how many lenders should be on a broker’s panel – indeed, a broker may have a small number of quality options for you or a large number of unsatisfactory ones. Even so, you may feel that the more lenders a broker deals with, the greater the chance they will find you a suitable home loan deal.

Do they favour a particular lender? If a mortgage broker sends a large proportion of their business to one particular lender, you may want to ask why and if they are rewarded in some way for doing so. Even though brokers are required to act in your best interests, you may be concerned that you could miss out on a better deal elsewhere if your broker favours just one lender.

What is their ownership structure? When assessing a mortgage broker, it may be worthwhile asking if a major bank or lender has an ownership stake in their business. You may be concerned that the broker will try and direct your business to this particular institution, causing you to miss out on a better home loan deal elsewhere. Likewise, it may be important for you to know that your broker is independent.

What post-settlement services do you provide? Mortgage brokers in Hobart will be keen to help you organise a home loan, but for many, their services don’t end there. Some brokers go a step further by conducting annual reviews of your loan to be sure it still meets your needs. The broker may even contact the lender each year on your behalf to negotiate a rate discount. It’s worth asking what sort of service your broker will provide after your home loan has settled because it can help you remain confident that you have the loan that meets your needs into the future.

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About the author

Nicola Field is a personal finance writer with nearly two decades of industry experience. A former chartered accountant, who holds a Bachelor of Commerce and a Master of Education degree, Nicola has contributed to several popular magazines including the Australian Women’s Weekly, Money and Real Living. She has authored several best-selling family-focused finance books including Baby or Bust (Wiley) and Investing in Your Child’s Future (Wiley).