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The common misconception that mortgage brokers charge a hefty fee is pertinent in Australia, a new report by Pepper Money has found.
While the majority of Australian mortgage brokers offer home loan guidance and application assistance to prospective borrowers without charging a fee, 57 per cent of Australians believed engaging with a mortgage broker was expensive, new research by Pepper Money found.
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Its Money Mindset Report, which surveyed 1,000 individuals, found that despite this misconception, the majority of Australians also understand the value of a mortgage broker, with most agreeing that a broker can help them understand their options.
In fact, 81 per cent of those respondents who previously used a broker said they would do so again in the future. It echoes similar findings from Momentum Intelligence's Consumer Access to Mortgages Report 2022, which found 85 per cent of broker clients reported feeling satisfied with their level of communication, compared to 72 per cent of proprietary channel customers.
Pepper Money chief executive, Mario Rehayem, has urged borrowers to seek the advice of their broker as the same data revealed that Australians are more likely to spend time understanding their options for their phone contracts (71 per cent) rather than their home loan (60 per cent).
“Contrary to popular misconceptions, mortgage brokers actually work for you. They often won’t charge you for their services, and it’s in their best interest (and yours) to match you with a home loan and lender that meets your objectives for the long term,” Mr Rehayem said in the report.
“It’s important that borrowers understand there are often a range of alternative flexible finance options to explore beyond the banks, and they should seek out and understand their options before taking ‘no’ for an answer or jumping at the first ‘yes’ they are offered.
“It’s a broker’s role to get to know you and act in your best interests — unpack your needs and goals, analyse your borrowing capacity and understand what’s important to you in a loan.”
Nearly four in five respondents (78 per cent) admitted to experiencing regret at least once as a result of a past financial decision and 71 per cent of those said in retrospect, seeking additional options would have enabled them to confidently make a better financial decision.
“Taking a little extra time to understand your loan options could put more money back in your pocket, help you get the best option for your circumstances, or even be the difference between getting approved for a loan or not, surely that is time well spent,” Mr Rehayem said.
[Related: 'Golden opportunity' for brokers as borrowers fear loan rejection]
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