When it comes to one of the biggest financial decisions you’ll ever make, it pays to have some professional help. But how do you find a good mortgage broker, and what can they offer? Here’s what to look for.
A good mortgage broker is able to offer suitable product solutions due to the expansive panel of lenders and mortgage products available to them. Brokers have long standing relationships with a range of lenders. They stay up-to-date on the latest features and loans available so that they can give their clients the best solutions for their individual circumstances.
A winning client-broker relationship is one that makes you feel comfortable, confident and collaborative. This means that a broker will be genuinely interested in your current and future financial situation and loan needs. They should communicate well and be reasonably contactable. They should also be happy to take the time to explain loan jargon such as mortgagee, LMI, LVR and so on.
Smart brokers who are on the ball will also welcome – and encourage – you to ask questions and will be prepared to answer them to the best of their ability.
A good broker won’t send off a loan application with guns blazing. Instead, they’ll take the time to assess your financial situation and lifestyle to ensure the loan type and amount you’re seeking is in fact the right loan for you. Many mortgage brokers offer free home loan health checks to determine your financial borrowing capability before embarking on the application process.
All mortgage brokers must be authorised to provide credit advice by an Australian Credit Licensee holder. However, the mortgage broker you want to be working with seeks to improve his or her qualifications and training by joining associations such as the Mortgage and Finance Association of Australia (MFAA) or Finance Brokers Association of Australia (FBAA), and completing continued education courses from year to year.
When trying to decide on a broker to go with, look for one who has relevant experience working with the type of borrower you are. Yes, that’s right – this is one instance where it’s okay to make it all about you! Ask your mortgage broker what percentage of previous or current borrowers on their books are first home buyers, investors, commercial borrowers or retirees. Getting an idea of the kind of work they primarily do will give you an idea as to whether they are the right broker for you.
A good mortgage broker will focus not just on the here and now, but also the future. While your first home loan may be a significant step, it is likely to be the start of your property-purchasing journey, paving the way for your second and perhaps third investment. Therefore it’s wise to weigh up a broker’s initiative about staying connected with you. This could be via phone calls or emails, invitations to property-investment seminars, tips on how to manage your mortgage or reduce your repayments, refinancing or other subjects that may interest you in the future.
Lastly, a mortgage broker should be willing to openly and honestly discuss their fee arrangements and the commissions they may receive from lenders. This will help you understand the process and consider the value you are getting from the broker. You may have to request this information from them, but do find out about their fee structures and compare between brokers to get a good deal. Remember that this shouldn’t be a defining factor in your choice.
Finding the right mortgage broker could be all that stands between you and your property dream. But by keeping these tips in mind when talking to prospective broker partners, you could be on your way to property-purchasing success sooner rather than later.