What are some of the differences between a mortgage broker and a mortgage adviser?
Are there really any differences between a mortgage broker and a mortgage adviser?
Are you looking for some help understanding home loans, mortgage application processes, and what it all means but getting confused about the differences between a mortgage broker and a mortgage adviser?
You’re not alone.
In fact, the question “what’s the difference between a mortgage broker and a mortgage adviser” is entered into search engines around the world hundreds of times a day!
Why is there so much confusion about the differences between a mortgage broker and a mortgage adviser?
When you’re looking for answers, it can also be frustrating when people in forums or even on financial institution web sites use these two terms interchangeably. Seeing people use the words interchangeably (sometimes even in the same sentence!) can leave you asking if that means that a broker and an advisor do the same job – or do many people just not understand the distinctions between the professions?
The short answer is that the financial industry changed!
In 2020 the financial industry decided that mortgage brokers need to be accredited with a Level 5 Lending Certificate, and because of this the official title of home loan professionals holding that qualification became “Mortgage Adviser”.
Many people still use “mortgage broker” colloquially, but technically now only qualified individuals can call themselves mortgage advisors.
To make it even more confusing, before 2020 many of the professionals themselves would actually swap between terms! A mortgage or home loan professional may have a personal preference, or see parts of their job as being more of what they do and therefore identify as either a broker or an advisor as a result.
What do the job titles ‘mortgage broker’ and ‘mortgage adviser’ actually mean?
Colloquially, the job title of mortgage broker specifically refers to a person or entity who can negotiate with banks, investigate deals around town, discuss interest rates, and use their network to locate and define the best home loan for your circumstances.
In fact, the definition of the verb “to broker” is to arrange or negotiate an agreement – in this case to negotiate the terms of a mortgage on your behalf.
Beyond the technical difference of being someone who holds the correct qualification, a mortgage adviser is able to do all of those practical things to get you the best home loan arrangement but are also concerned with your long term goals and getting you the right mortgage.
Let’s Look At What A Mortgage Adviser Does:
1. Discuss the loan in terms of your long term goals and lifestyle dreams
2. Advise clients on the mortgage options that will help them to achieve the lifestyle they want while repaying the loan, and work towards the financial and lifestyle goals they identified.
3. Help them to understand the entire home-buying process from start to end, and how their current options look within the property market.
4. Explain and assist clients to structure their loan in a way that works long term – not just bringing down the interest rates to get you in the door.
5. Be able to explain and utilize funding options to help you best achieve your home loan requirements.
6. Give you the best possible idea of calculated repayments using a range of data points, and help you assess your ability to meet those repayments.
7. Provide administrative support and practical help to clients while completing a mortgage application.
8. In addition to the administrative work that goes into a good home loan application, we can assist you to organise building reports, home valuations and insurance.
The differences between a mortgage broker and a mortgage adviser comes down to a change in NZ financial industry specifications – mortgage advisers hold the Level 5 Lending Certificate.
