UBS Investment Bank released a report recently, stating a third of borrowers provide factually incorrect information to secure a mortgage. The survey asked 1,228 borrowers in Australia.
A greater proportion of respondents who supplied incorrect data said they used a mortgage broker rather than a bank.
Which begs the question, are mortgage brokers bad news? Let’s start with the survey’s findings.
Okay, we’re just going to come right out and say it. The figures don’t bode well for mortgage brokers in Australia, but it’s also important to note that the survey itself was conducted by a bank and only took in a relatively small demographic of people.
Like any industry, it’s vital to choose the right business for the job. When it comes to finding a mortgage broker; that means doing your due diligence before making a choice.
Here are some tips to help you make the right decision:
Bank versus broker
There’s a reason why 52% of Australians choose a mortgage broker over a bank – they’re more likely to secure a better deal. This is because a good broker compares hundreds of different home loan products, before pinpointing one or a few that are competitive and match your goals.
In most cases, a bank only has a handful of products to offer its customers. So it’s impossible to know whether you could have secured a more affordable home loan from someone else, with better terms.
It’s also a matter of competition.
A mortgage broker looks at a number of home loan products from bank and non-bank lenders, small and large. They don’t have an alliance with a lender, just a vested interest in getting you the best deal possible.
If they don’t do that, you’re likely to go to someone else. Helping you save more is their absolute end-goal. Of course, finding a good mortgage broker is the key, so when you’re searching, be sure dig below the surface by doing your due diligence.
Let’s get back to the study we mentioned earlier. With a third of borrowers reportedly providing inaccurate data, is this the right way to go? In our opinion, absolutely not.
This is because your mortgage should 100% reflect your situation – that means your assets, liabilities, employment situation, income and other relevant financial stats.
If you’re making numbers up, you’re more likely to find it difficult to repay your loan. That’s a situation no borrower wants to be in, no matter how great a home or investment property looks.
Of course, if you part with your figures and discover a loan isn’t viable for you, a good mortgage broker shouldexplain what is necessary to bridge the gap.
This provides you with a practical plan, which in the long term, means you are more likely to secure a property and pay off a mortgage without feeling unnecessarily stressed.
We never ever recommend pushing the limits of repayments, because your mental health is just as important as your financial health.