How do you actually get a mortgage? How do you get a loan for a property and what really happens on settlement day?
In this Australian Property Podcast episode, Chris Bates, the founder of Blusk who was recently voted one of NSW’s top mortgage brokers; and myself (Owen Rask, founder of The Rask Group), dive deep into every single step of the mortgage broking process.
Chris and I cover every step of mortgage broking and how a really good mortgage broker should treat their client (you). We cover what you’ll need to prepare, what to expect at each stage and how to improve your chances of securing funding for a property.
If you’re new to getting a mortgage, buying a property, or simply thinking about partnering with a good mortgage broker, I think this Australian Property Podcast episode is a must!
The 2 common ways to get a mortgage
In short, there are two ways most people get a mortgage/loan/credit to buy property in Australia:
- Go direct to a bank.
- Use a mortgage broker. This is now the most common option, by far.
Over the past decade, the mortgage broking industry has blossomed because, I think, it helps would-be property owners make a more informed decision when it comes to picking lenders, finding a good rate, understanding the different types of ‘products’ (offset accounts, redraw, fixed versus variable loans, etc.).
How are mortgage brokers paid?
In Australia, mortgage brokers don’t often get paid by you directly. Instead, most mortgage brokers take a small upfront commission, typically around 0.6% of the loan. They get their upfront payment when the loan settles, or the month afterward. Mortgage brokers can also get paid a ‘trailing’ commission, which is much smaller (around 0.125% of the loan). Some brokers take upfront payments.
However, in my opinion, the distance between good mortgage brokers and bad mortgage brokers is incredible. Unfortunately, picking a good one out of the gate is really tough and many don’t want to deal with ‘complicated’ situations.
In this episode, we cover a lot of the ‘ifs’, ‘buts’ and ‘maybes’ that come up in conversations with mortgage brokers.
In case you’re new to The Australian Property Podcast (welcome!) and for disclosure only, Rask & Blusk have a referral partnership in place. You can find all of the details on our mortgage broking page.
