7 Steps to Find a Great Mortgage Broker

By Shane | Mortgage Brokers

May 21

The decisions you make when purchasing a property are likely to be some of the most significant financial decisions of your life. Whether you are buying your first home, upgrading, downgrading, or refinancing, an expert mortgage broker can help you understand your home loan options. But how can you find a good mortgage broker near you? Read on to learn 7 steps on how to find a great mortgage broker.

#1: Start Your Research

Before starting your search for a mortgage broker, start conducting your own research and educating yourself on your possible options. This could include reading about the differences between fixed vs variable interest rates, offset vs redraw, and repayment options. This will help prepare you for your initial meeting with the mortgage broker.

Once you’ve conducted some basic research on loan options, you can then start researching mortgage brokers themselves. You can use comparison websites or directories to read reviews of mortgage brokers and the service they have provided to other people.

#2: Review Their Experience & Qualifications

Take the time to check your mortgage broker’s experience and qualifications. Your first port of call should be to check the ASIC credit representative register. ASIC is the regulator for mortgage brokers and they maintain a register of licenced mortgage brokers. Checking this register reduces the probability that you will receive unauthorised credit advice. Keep in mind that mortgage brokers can have their own credit licence, or they can be an authorised representative of an organisation that holds an Australian credit licence.

After you have confirmed that they are an authorised mortgage broker, you should then ensure that they are a member of a professional association. The MFAA and FBAA are two such professional bodies and they ensure that their members adhere to professional standards.

Next, you should check your potential mortgage broker’s experience. Some mortgage brokers will list this on their website, while others may need to be asked directly. When considering their experience, ensure that they have sufficient experience in the category that you fall into. For example, a broker who specialises in asset finance for companies may not be the most appropriate mortgage broker for a first homeowner looking for their first residential property.

Qualifications are another important factor. All mortgage brokers must have minimum qualifications – i.e. a Certificate IV in Finance & Mortgage Broking – to work in the industry. However, some will have gone above and beyond the minimum. Has your mortgage broker satisfied the minimum requirements? Or have they continued their professional development and gained in-depth knowledge in specialist areas relevant to you?

#3: Understand the Mortgage Brokers’ Business Model

Mortgage brokers have options when it comes to their business model. Some will choose to be authorised representatives of credit licence holders. Others will decide to obtain a credit licence themselves. This is important to know as some credit licence holders (or aggregators) can be owned by large companies. These companies can control what and how they conduct their business. This isn’t necessarily something to be concerned about, but it is handy to know so you can identify potentially biased advice (e.g. a preference by the mortgage broker to recommend a white-label loan that is actually just a rebranded loan offered by the bank that owns them).

A mortgage broker’s business model can also impact which loans they can recommend. This leads me to my next point…

#4: Enquire About Their Lender Panel

The ‘Lender Panel’ is a list of home loan & finance providers that a mortgage broker can recommend. This is controlled by the credit licence holder. Not all mortgage brokers have a say in who is featured on the lender panel.

When enquiring about the lender panel, you are looking for a broad range of lender options. Some brokers will only have a handful of home loan providers on their panel, while others will have dozens. These could range from the big 4 banks to smaller, more specialist lenders. It’s important that your mortgage broker has access to options so that they can align your personal circumstances with an appropriate choice of home loan to help you achieve your property ownership goals.

#5: Keep Your Options Open

While it may be tempting to go with the first mortgage broker you come across, the reality is that you should compare your options. This would involve creating a shortlist of mortgage brokers that you want to meet with. This will allow you to assess whether they are a good fit. More importantly, you can ensure that you are comfortable working with them.

You should be assessing whether they explain things in easy to understand language, are actively listening to your goals, and if they are applying pressure tactics to rush you into something. You need to remember that you are making a significant financial decision. Because of this you must be 100% comfortable with the advice that you are receiving. If something doesn’t feel right, move on to the next broker to find someone you are comfortable with.

The only way you will find a great mortgage broker is if you ensure that you are 100% comfortable with how they communicate and how they operate.

#6: Ensure Everything is Documented

When working with a great mortgage broker, they should provide everything in writing. This would include:

  • Credit Guide: This explains a bit more about the broker, their business, how they are paid, as well as complaint resolution procedures.
  • Privacy Statement: You will be discussing some sensitive information with your mortgage broker so this document highlights how they will handle your information.
  • Credit Assessment: Mortgage brokers must make an assessment of a home loan and whether it is “not unsuitable” to you based on your personal circumstances. Make sure that the information recorded aligns with the information that you have provided.
  • Quote: Some mortgage brokers will charge a fee while others only receive a commission. If your broker charges a fee, they will need to provide you with a written quote.
  • Proposal Document: This sets out the cost of a broker’s services including indirect payments they may receive (i.e. a commission). This document must be provided at the time that a mortgage broker provides credit assistance to you (i.e. recommending a specific product or helping apply for a loan).

#7: Share Your Experience

Whether you find a great mortgage broker or decide not to use a broker for whatever reason, you should consider sharing your experience so that other people can find a great broker themselves. You can use the normal channels (e.g. Google reviews). Howver, also make sure that you are sharing your experience on specialist mortgage broker directories (such as Pearl Financial). Take the time to think about what made your mortgage broker so great and capture this in your review. Remember to stay factual and give enough of an explanation to help other people in their search for a great mortgage broker.

Going through this final point will also help you reflect on your experience. This will better prepare you for the next time you need to work with a mortgage broker.

Author: Shane

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