Personal Finance

Talk To A Broker – How Thousands of Aussies Save More

Why talking to a broker is beneficial! Over the years, more and more Aussies are learning that the bank loyalty strategy is failing to provide any rewards. In many cases, the acquisition of new customers takes precedence in accessing better financial deals. Have you ever had a bank contact you to say – Your current interest rate is no longer competitive, we’d be happy to provide you with this new lower rate!

Comparing the market

As competition picks up and technology helps provide more transparency, more and more proactive households are taking advantage of better financial products. The explosion of comparison website has made identifying the best rates or products across multiple brands very easy. Unfortunately this is not the whole picture and can be a bit misleading. Different sites may not have access to all lender products and the loans they are showcasing may be hard to qualify for. Whilst many sites are doing a better job of providing tailored options, they are predominately an enquiry vs finance approval.

This is where brokers can provide a more custom solution with actual finance options based on your circumstances. It you talk to a broker, they are typically able to understand the detailed requirements of loans across multiple lenders and provide actual solutions you qualify for. Below are the benefits and potential drawbacks of working with a broker. Learn how so many Aussies are saving thousands.

Understanding pros & cons of a broker

Firstly Here Are Advantages
– A broker can save you time and money by providing actual finance options across local and national finance options.
– In general its a no hassle service with them taking care of the majority of the paperwork (if any)
– Brokers in many cases may have access to reduced rate finance that is not publicly advertised.
– Brokers can work directly with lenders to get over obstacles that may have seen the application be declined in normal circumstances.
– Home loans, car loans etc are large financial commitments and decisions. Being able to speak to a expert provides confidence in making tough decisions. Brokers are great at answering frequently asked questions in regards to finance, as well as providing information you may not have thought of. There are loads of home loan options that many are unaware of.

Secondly The Potential Disadvantages
– In the past, money driven brokers may have not had their customers best interests in mind. The 2017 Royal Commission into banking delivered many changes to the broking industry. One of which is the brokers best interest duty, which means brokers are legally obligated to review the market and find you the best loan they can.
– Brokers may not have access to all available financial products. However if there are lenders with better finance than what they are able to secure, they can negotiate with their panel of lenders to loan match or beat the other finance.
– As with any profession, some brokers are better than others. Working with a reputable and established broker network provides a potentially better outcome.

If considering finance and your unsure of where to start or want to make sure you bank is providing you with the best deal. You should give it a shot and talk to a broker. Its one conversation that will provide you back with multiple options. Why speak to 3 or 4 different banks, repeating yourself when you can speak to one person and access more?

The Broker Boom

During the Australian housing boom of the last few years, brokers were responsible for providing a large portion of these loans. With the increase in lending came additional lending options which in many cases were better than the options provided by the big banks. Brokers provided borrowers with more options to help Aussies not only save money but access favourable finance for their needs. The result are clear based on the record amounts of homes purchased over the years.

Talk to a broker rates are rising
However, times are rapidly changing with the increase to interest rates! It is estimated that the RBA will continue to increase rates with frequency until the middle of 2023. The increase on the family budget may be severe for many. For those already feeling the squeeze on the family budget, now is a good time to talk to a broker to see if you can get a better deal and or refinance high interest debt.

As an example (2022 RBA Activity):
If prediction by some bank analyst come true, it means a cash rate hike up to 0.75% could increase monthly repayments by another $111 on a $500,000 home loan.

Aussies with higher loans like $1 million would be looking at a monthly repayment increase $138 for a 0.25% hike, and $222 for a 0.4% increase.

In addition to mortgage pressures, inflation is similarly putting the squeeze on family budgets. Fuel, electricity, groceries prices and more continue to rise. Making it more important for families to try and find savings – Speaking to a broker can help.

Be like the thousands of proactive Aussies who make one phone call and save themselves thousands – Talk to a broker today!

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