Even in a time when the internet rules, the banks spend million of dollars on advertising and have mobile lenders that will come to one's place, a good mortgage broker will always be better to organise one's finance!

What's wrong with using the internet to apply for a loan?

Let's start with the internet: you can compare home loans, you can see advertised rates and you can read review about this lender or that solution but you will never get the full picture.

• What about the best possible structuring?
• Would you benefit from a guarantee?
• Should you cross collaterise your securities?
• What are the difference in mortgage insurance premium in between the different lenders? What about negotiated rates which are not advertised?

What about shopping around the banks myself?

Let's then move on to any one bank or the self shopping option. I think it is obvious enough: if you can benefit from the personal service of your own mortgage broker advocating on your behalf – most often at no cost – why would you not? It will undoubtedly save you time and money!

A mortgage broker will be able to compare current offerings for your circumstances in much more depth, and much less time, than it would take to do it yourself. The broker knows and understands the jargon, the policies and requirements from different lenders and their niches.

Even if you want your loan to be with one specific lender you should speak to a broker who will be able to negotiate with them for you: they will never be as competitive as when they are made to beat their competition!

Examples of how a mortgage broker can get you a better deal...

1. Let's say you're shopping for a home loan for a new purchase and needs to borrow 85% of the property value. The internet will give you plenty of options to look at.

Eventually you find out that Lender A has the lower fee and a fantastic interest rate of 6.80% which is much cheaper than anybody else which surely makes it an easy decision not requiring the assistance of a broker!

Or does it?

A broker would have been able to tell him that Citi Bank allow for 85% loan without mortgage insurance for purchases and even though their rate is higher the initial savings of $5,000 way out do the difference in rates.

2. You have a mortgage on your property and have just purchased an investment property so that your total borrowing will now be $1,200,000. After speaking with your bank's mobile lender, you've been offered a great 1% discount on the variable rate, and you're really excited about the deal you've negotiated.

On the other hand, a mortgage broker could have either negotiated a better offer for you with the banks by tendering your business to all of them, OR could have introduced you to a smaller non bank lender which are currently offering incredibly good deals for this type of loan.

Either way a good broker could have saved him thousands of dollars over the life of his loan!

3. In the last example, you have a $16,000 car loan which has a 13% p.a. interest rate and after browsing the internet to find the cheaper lender you proceed with them to consolidate your car loan into your home loan.

After the valuation is returned to the bank you're advised that you does not have enough equity to proceed with the consolidation.

A good mortgage broker would have advised you that some smaller lenders will offer a $20,000 credit card at the mortgage interest rate which you could have use to refinance your car loan without affecting the current loan to value ratio – saving you thousands in interest and easing the burden on his budget.

So what does all this tell us?