Why every First Homebuyer needs a Mortgage Broker

It has never been harder for young Australians to buy their first home – and at the same time, it’s never been more crucial to ensure as many people as possible can get a foot on the property ladder.

For better or worse, whether or not you own property is one of the biggest factors that determines the kind of life you’ll have. Will it be one of financial security and wealth creation? Will it be one that builds a solid foundation for your children to achieve their own levels of success when they grow up? Will it be one that offers the best prospects of a comfortable and consistent retirement?

Without bricks and mortar, perhaps not. Just look at the outcomes for older Australians right now, comparing those who own their home and those who have no assets. It’s pretty grim.

But in the here and now, young Aussies are being trapped in the never-ending and worsening nightmare that is the rental market. Skyrocketing prices, which are running alongside a cost-of-living crisis, are sucking up more and more of Millennial and Zoomer pay packets. 

It’s not just getting ahead that feels incredibly tough, but also merely keeping your head above water.

Getting into your first home puts you on the path to financial freedom. It saves you from paying someone else’s mortgage and enduring the insecurity of a rental. It allows you to begin building wealth that will put you in good stead down the track.

But when interest rates are high, borrowing power is low and the cost of purchasing edges upwards each month, how can hopeful first homebuyers crack in?

An experienced and qualified finance broker is like having an unfair advantage in the borrowing space. They work with you to understand your current position, your goals and ambitions, and then plot a path to get you there.

Australia’s mortgage market is vast and complex, with a plethora of lenders and loan products available to consider. 

There are fixed and variable interest rates – as well as a combination of the two. There are offset accounts and loan terms of varying lengths. There’s lenders’ mortgage insurance if your deposit isn’t quite big enough. There are different packages, inclusions and bonuses, some of which sound fantastic but might end up costing you more in the long run.

And amongst it all is a sea of jargon and terminology, as well as a mountain of paperwork, that can become totally overwhelming.

Mortgage brokers are experts in this field. They sift through the noise to find a loan that suits your specific needs and financial situation. They know the ins and outs of different products and can guide you to the best option, saving you from potential confusion and costly mistakes.

They can go out into the market to find you the best possible deal, saving you the time and stress of shopping around. And they could save you some serious money, which is especially important at the moment.

One of the biggest advantages of using a mortgage broker is their access to a wide network of lenders. While you might only be familiar with the big banks, brokers have relationships with a broad range of lenders, including smaller institutions and non-bank lenders. 

By working with a broker, you can tap into a whole field of options that you might not know exists. And you’re working with someone who communicates with these lenders daily, meaning that any questions – or clarifying sticky points in your application – can be done quickly.

A really good broker will help hundreds all types of property buyers secure finance each year – and that includes first-time purchasers. They’ve seen it all. They know the process inside and out, regardless of the type of borrower and the lender they’re applying to.

They also understand the various grants and schemes on offer to help first homebuyers get a foot in the door. And there are plenty at the moment, with different options, including some supercharged First Home Owner Grants, depending on the state or territory. 

The Federal Government is also rolling out a suite of generous incentives, including deposit guarantees and shared equity schemes. They will make the process of buying your first home quicker and easier, but there are plenty of caveats and some important considerations, which a broker can help you to consider.

Brokers know what’s on offer and can help you get it. On top of that, aside from government grants, brokers can also possibly negotiate a better deal with a lender, from an introductory rate to waived fees and charges.

When you buy your first home, you’ll have to jump through more hoops than an Olympic gymnast in order to satisfy the lender’s criteria.

What makes this process even more challenging is that every bank’s requirements are just a little bit different. Some will want more paperwork than others – bank statements for a year instead of six months, several pay slips instead of two, full employment contracts rather than just your declaration that there are no special conditions in place, and so on.

How most view you will depend on a range of factors, including whether you’re a single first homebuyer, in a couple, buying with a sibling or a mate, working full-time or part-time or have a mix of jobs, or you’re self-employed or own a business.

They will pore over your financial records, with your credit score just the start of things. Some will even query the frequency of buy now, pay later arrangements and how many streaming services you’re subscribed to. Picture the most grueling, demanding and nerve-wracking job interview you can possibly imagine, and then double it. 

Working with a broker takes a lot of the stress out of the situation because you’ve got someone who understands how the application process works and what’s needed. They can help you get everything in order, so you make the best first impression possible.

A broker can also help you to secure finance pre-approval, which gives you certainty about just how much you’ve got to spend. It also speeds up the process hugely once you’ve signed on the dotted line on a purchase contract.

Buying your first home is likely to be a long, uncertain and anxious experience for many. Working with a broker can ease a lot of this pain by letting an expert handle the finance side of things.

They can help to save you money by getting you the best deal. They can save you a whole heap of time by helping you consider the options and complete the application, doing all the heavy lifting while you’re busy finding your dream home.

They can help avoid any potential pitfalls by anticipating what’s needed, how best to present it, and ways of giving yourself the best possible chance at success.

And they’ll help to gently guide you through the uncertainty. From the initial meeting to the final settlement, they provide ongoing assistance and advice. They’ll keep you informed of any changes in the mortgage market that could affect your loan and offer guidance if any issues arise during the application process. 

Their support ensures you’re never navigating this complex journey alone.