Mortgage Brokers - Answers to Common Questions

Mortgage Brokers - answers to common questions

Establishing that a broker is right for you and has experience and qualifications, as well as being committed to the industry code of practice, is vital to ensure you're getting the best loan for your needs. Here is a step-by-step checklist that will help you know if your broker is on the level.

For all residential loans, broker's services should be free.
The right broker will take time to really understand your financial situation, both now and in future.
Your broker should have a range of home loans from a wide variety of lenders
Ensure your broker is not just an agent for one lender.
Check the qualifications and experience of your broker, even ask references from previous borrowers. Are they an MIAA member of the professional mortgage association (MIAA/FBAA)?
Make sure your broker discloses all commission on payments received so you can judge whether a particular loan recommendation is being influenced by how much the broker will be paid.
Ask your broker to show you the comparison of the loans they offer for your situation.
Ask your broker about how they compile with the Privacy Act to ensure security of your personal and financial details.
A good broker should be able to explain the most complex loans in plain English
Last but no the least, it really helps if you actually like your broker as well.

2. How can Brokers services be free? Aren't there any hidden costs involved?

Brokers usually run their own businesses. Lenders work with Mortgage Brokers because they effectively give the lender a bigger 'shop front' without carrying a traditional employee overhead. The lender pays the broker fees or commissions for your business so you are not paying anything for broker's services to you. Just as if you were dealing with a bank manager or lender, these fees do not change the interest rate you pay on a home loan. more about why mortgage brokers services are free

3. Why should I use a mortgage broker instead of going directly to the lender?

It's all about options. When you apply for a home loan with a mortgage broker you are effectively applying for a loan with all the lenders the mortgage broker works with. If you only applied to one lender, you may be lucky and get the same match, but you would certainly never have been able to consider the same range of lenders. Money is a commodity. The cheaper you "rent" it and the harder you make it work, the better off you will be. A mortgage broker's job is to get you the cheapest possible deal, with the right features, which has the closest match to your personal finance situation from their panel of banks and major lenders. And you can always check back with your lender! more about using a mortgage broker instead of going directly to a lender

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