Debunking 10 Mortgage Broker Myths

The topic of whether to enlist the assistance of a mortgage broker may come up when you’re trying to purchase a home and consequently need a mortgage product. Why do you need a facility if your present bank is providing you with one that you believe is a good deal already?

Regretfully, many people hold certain common misunderstandings about mortgage brokers, which causes them to lose out on all the advantages. In order to help you make a better decision when it comes to finance brokers in Sydney, this article will dispel some of the most widespread fallacies about them.

1. Lenders and institutions employ mortgage brokers.

Some individuals believe that because mortgage brokers represent particular banks or lenders, they are unable to provide a better bargain. Regarding independent mortgage brokers, this is untrue.

Since independent brokers have access to the whole market, they are totally objective and unaffiliated with any one lender. Brokers are not influenced by exclusivity or bias when they are looking for a bargain; instead, they will choose the products that best fit your needs and circumstances, even if they are likely to develop good ties with banks and lenders over time.

2. Mortgage brokers don’t really improve the procedure.

Nothing could be further from the truth than this assertion. Mortgage brokers look for a product that best suits your demands and situation by searching the market on your behalf. Not only can they negotiate the best price for you, but they will also support you at every turn, offering guidance, clarification, and assistance with any paperwork or application-related concerns.

3. Using a mortgage broker requires more time.

It’s possible that you believe working with Right Click Finance and our services will only add a step to the process and cause it to take longer, but this is completely untrue. Finding the greatest mortgage deal could take a lot of time if this is your first time applying for one and you don’t have much familiarity with the procedure. But, mortgage brokers are knowledgeable about most products available and have expertise with them, so once they understand your demands, it won’t take them long.

If you have never applied before, they will also be able to assist you with the procedure, which will also help to speed things up.

4. If I have bad credit, I can’t utilise a mortgage broker.

Mortgage brokers will be able to tell you which banks and lenders are more lenient with their requirements, even if certain lenders are harder on credit scores than others. You have a better chance of finding a lender who accepts applicants with less-than-perfect credit scores if you use mortgage brokers who are available to assist you.

With any luck, this post has allayed your questions and increased your knowledge of mortgage brokers’ duties. Using a mortgage broker or going direct to the lender is ultimately up to you. Still, with all the facts at your disposal, you may feel secure in your choice.

5. A down payment of at least 20% is necessary.

The idea that you need a 20% down payment to get a mortgage is one of the most common misconceptions. It is not necessary to have a larger down payment, but doing so might have benefits, including lower monthly payments and cheaper mortgage insurance. Many mortgage programs provide possibilities for a smaller down payment, which makes homeownership more feasible.

6. Reduced Down Payment = Increased Interest Rates

Despite what many people think, lower down payments do not always equate to higher interest rates. When setting interest rates, lenders take into account a number of variables, such as loan type, debt-to-income ratio, and credit score. No matter how much down payment you choose, you may obtain competitive interest rates by keeping a clean credit record and looking into several mortgage options.

7. Every Mortgage Is the Same

Mortgages are not made equally. Mortgages come in different varieties, such as open, closed, variable, and fixed-rate mortgages. Each has benefits and drawbacks, so it’s critical to comprehend the distinctions and select the option that best suits your objectives and financial circumstances.

8. Mortgage Insurance Offers Borrower Protection

The borrower is not protected by mortgage insurance, which is frequently needed for down payments of less than 20%. Rather, it safeguards the lender against default. Homeowners who want to protect their family’s financial future should think about working with Right Click Finance and our services.

9. Only Low-Income Buyers Are Eligible for Down Payment Assistance Programs.

Programs for assistance with down payments are not just for those with modest incomes. A variety of homeowners, including first-time purchasers, veterans, and individuals with moderate incomes, are intended beneficiaries of these programs. These initiatives include low-interest loans, grants, and financial aid to help close the savings gap and make the necessary down payment.

10. A larger down payment will always result in cost savings.

It’s not always the wisest financial move to make a larger down payment, even while it will lower your monthly mortgage payments and possibly save you money on interest over the course of the loan. It’s crucial to assess the benefits and drawbacks of making a bigger down payment as well as your overall financial objectives.

If you allocate a significant portion of your savings towards a down payment, for example, you may find that you have less money saved for other financial objectives or emergencies. Finding the right balance between your down payment and keeping a sizeable financial cushion is crucial.

To conclude,

Anyone planning to buy a home needs to know the reality behind these popular mortgage myths. You’ll be more equipped to choose when it comes to your mortgage options if these myths are dispelled and you gain knowledge.

the authorBettie