What a Broker Actually Does for First Home Buyers

Fair question, and one worth answering plainly, including the part about how we get paid.

The short version

A lender can only offer you its own products. A broker looks across a panel of lenders and works out which one's policy fits your situation, then manages the application through to settlement.

For a first home buyer, most of the value isn't in finding a slightly lower rate. It's in not getting declined, and in not wasting six months aiming at the wrong number.

Lender policy is the real product

Every lender has its own rules about how it treats overtime, bonuses, commission, casual work, self employment, HECS, and how much of your income it will shade.

Those rules are why the same file gets different answers from different lenders. It isn't luck.

Knowing which lender is comfortable with your particular situation is the difference between an approval and a decline, and a decline leaves a mark on your credit file that the next lender can see.

The schemes

There are five first home buyer schemes running in Victoria, they have different caps and different definitions, and most of them stack.

Working out which combination applies to you, and in what order, changes what you can afford rather than just whether you qualify.

That's a genuinely fiddly piece of work and it's a normal part of the job.

Structuring the loan

Beyond the rate, there's whether you have an offset, whether you can make extra repayments, whether to split fixed and variable, and how the loan is set up if you might renovate or move in a few years.

Those choices affect what the loan costs you over its life more than a small difference in the headline rate does.

How brokers get paid

You should know this before you engage anyone.

For a standard residential home loan, the lender pays the broker a commission when the loan settles, plus a smaller ongoing trail while the loan runs. In the usual case, the borrower does not pay a fee.

Commission is broadly similar across lenders, and brokers operate under a best interests duty, which is a legal obligation to act in your interests rather than our own.

Ask any broker how they're paid and whether any fee applies to you. A straight answer is the minimum you should expect.

What a broker should do that a comparison site can't

Read your actual situation, including the parts that don't fit a form.

Tell you when the answer is no, and what would change it. "Close these two cards and come back in six weeks" is more useful than an approval you can't get today.

Handle the paperwork and chase the lender, which matters more than it sounds when you're inside a finance clause.

Stay in touch afterwards, because the loan you take today should still suit you in three years.

What to ask before you pick one

• How many lenders are on your panel?
• How do you get paid, and does any fee apply to me?
• Have you done many first home buyer files, and which schemes have you actually used?
• What happens if the answer is no?

Where to start

Before you talk to anyone, get a sense of the numbers yourself. The calculators on this site are free, they don't require an account, and they show their working.

Then the conversation starts from a much better place.

Let's get you into a home.