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MyRate Education Centre
Mortgage Brokers
A broker is...
An individual or company who acts ans a 'middle man' between lender and borrower.
What they do...
Mortgage brokers have access to many different loan products from different lenders. They provide you with options and submit the loan on your behalf.
Do you need a broker?
If you don't have time to compare home loans yourself then a mortgage broker may be a good idea. Doing the legwork yourself however, could pay off. There are many products mortgage brokers do not have access to, such as those of direct lenders like MyRate. MyRate has developed a useful site to help you build a borrowers profile and compare home loan products www.BorrowersStartHere.com.au.
Direct Lenders
Dealing with a direct lender like MyRate, instead of a broker could save you thousands – Here's why:
When you deal with a mortgage broker, chances are you will end up with a home loan from one of the major banks. Banks pay brokers a commission for loans they set up.
Broker's commission on 300K loan
- Upfront payment of up to 0.8% x 300K = $2,400
- Trail for the life of the loan apx. 0.2% x reducing loan balance (paid monthly)
While you don't pay the broker for their services, the extra money you fork out for having your home loan with a bank is lining the pocket of your broker.
Direct lenders such as MyRate do not sell their products through brokers – cutting out the middle man so you save! This funding model flow chart better demonstrates this point.
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