How to choose a mortgage broker
Buying a property is, for most people, both the biggest and most daunting purchase they’ll make in their lives. Negotiating different banks, credit unions, loans, grants and fees is a jungle for both newcomers and experienced but time-poor property investors. Finding a mortgage broker that translates the financial industry jargon into plain language as well as providing support and guidance throughout the home loan application and settlement process can help to turn a maze into a smooth and satisfying transition into property ownership.
Some crucial things to keep in mind when looking for a mortgage broker are:
Ask for recommendations from friends or read testimonials or references from brokers.
Positive references and testimonials, whether from a friend or previous clients of your potential mortgage broker, can provide a valuable insight into how they’ll work with you. A good mortgage broker is a partner in the home loan process, and a broker’s ability to develop good client relationships will enhance their ability to explore the right options for each person dependent on individual needs and circumstances. Meeting a broker face-to-face is an excellent way to check out a broker’s way of working and assess if they’re right for you – brokers are generally happy to visit you at a time and place that’s convenient for you to make the whole process easier.
Is the home loan service free of charge for you?
Outside of standard lending fees, check to make sure the service and advice a mortgage broker offers you is available at no charge to you. For example, Mortgage Choice’s home loan service is available free of charge to our customers because the lenders pay us a commission once a home loan is settled. Brokers should be able to give you expert advice, prepare paperwork, submit applications and assist you in applying for incentives (such as the First Home Owner Grant) at no additional cost than if you did it yourself.
If they do charge an upfront fee, make sure they explain clearly what you’re paying for. It’s also good to remember that some brokers will charge a fee if you switch home loans within a certain period. It’s important to be clear with your broker about all fees; a good mortgage broker will give you a clear outline of all expenditures during the home loan process and explain how and why each fee applies.
Find out how many lenders a broker has access to.
Make sure your mortgage broker has access to not only the big banks and credit unions but also the smaller institutions. Every lender is different, just like every home loan, and having access to hundreds of different options through many different lenders means that you’ll be able to find the right loan for your individual situation.
Make sure your broker is focused on your best interests.
It’s important that your broker can answer the question: “Why is this home loan the best one for you?” Make sure that your broker is matching your circumstances with the right home loan for your situation. Mortgage Choice prides itself selecting home loans that are the right fit for our customers’ needs – our focus is on putting you first.
Find a broker that is reputable, a member of the Mortgage & Finance Association of Australia and qualified to be giving you advice.
Qualified and registered mortgage brokers are able to offer educated advice and offer protection if any issues arise with the loan. Don’t be afraid to ask your broker about their experience and qualifications. Your mortgage broker should be up to date on all the latest rates with their lenders and the property market. It’s a mortgage broker’s job to provide detailed explanations of the loan process and provide you with a clear comparison of home loans, features and fees.
A home loan isn’t just about the interest rate – taking all of the loan’s features into consideration is important when selecting the right home loan for your needs. By ensuring your broker holds an Australian credit license you can be confident that they are providing full disclosure and that you are protected in the event of an issue with your home loan. Mortgage Choice is a member of the Mortgage & Finance Association of Australia (MFAA) and all of our brokers are, at a minimum, Certificate IV and Diploma qualified in Finance and Mortgage Broking Management and hold an Australian credit license as per ASIC’s requirements.