More than half of all loans go through a broker

With more Australians preferring to go through a broker than not, Mr Tarrant asked the editor of the mortgage titles at Momentum Media, Annie Kane, what investors should be doing to use a broker effectively.

Ms Kane said the majority of people are choosing to turn to brokers due to the competition and insights they offer compared to major banks.

“If you went into your branch, they only know their own products, and they’re only really able to talk about their own products,” Ms Kane said to Smart Property Investment.

“If you go to a broker, they have access to a huge amount of different lenders. Most have access to around 30 or 40. There’s obviously a whole plethora out there they can research and look into,” she said.

“Then they can really do all the hard work in terms of understanding what your situation is, what you’re trying to achieve, and what would be a loan that would be suitable for you, given all of the data that you’ve given them.”

If investors are also looking to invest interstate in locations they may be unfamiliar with, local brokers can understand the lending environment at a localized level, too, she added.

For example, if an investor wanted information about Tasmania, accessing information at a local level can help provide more specific investment advice.

“If you [want to] go to a Tasmanian-based bank, you won’t necessarily have a branch in your state, but you might want to use them if you're buying a property in Tasmania,” she said.

“So, having access to a broker will give you that oversight. They will know the lenders that will know that area. They know the lenders that have appetite for a particular investor risk profile.

“For example, some lenders have some changes around different kinds of apartments they would give loans for, and where they would give those mortgages. It’s really just having that real understanding of what the lending policies are.”

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