Are you thinking of buying a house, and you’re in the market now looking for a loan? Mortgage brokers can help you choose the best loan. The challenge is to choose the right broker.
Here are some tips to help you find the right mortgage broker:
1. Do your research
Before you look for a broker, do research on mortgage loans so you can gain a clear idea on the type of loans available for you. This will also help you determine which loan will work for your financial status.
2) Ask for referrals
Ask colleagues, family, and friends if they a mortgage broker they can refer you to. Asking people you know will make you feel more at ease.
3) Interview several brokers
Before you settle for a mortgage broker, make sure to interview at least three to help find the best one for you. Know how long the broker has been in the industry, the lenders on their panel, and the types of loans they offer. A good broker must have several years of experience working in the mortgage industry. It would also help to read up reviews and testimonials about the broker as this will provide you with insights on their relationships with their clients.
4) Check their accreditations and qualifications
The broker must be accredited under the National Consumer Credit Protection Act, has a Certificate IV, a Diploma in Financial Services Mortgage Broking, a member of the Mortgage & Finance Association of Australia (MFAA) and the Finance Brokers Association of Australia (FBAA), and a member of the Credit Ombudsman Service Ltd (COSL).
He or she must be registered with the Australian Securities and Exchange Commission (ASIC) and has an Australian Credit License (ACL).
5) Know how they get paid
Most brokers will get paid commissions from the banks; hence this will influence the advice of the broker to you. You must know the lenders they’re associated with to determine if they are giving you their best opinion.
6) Ask about their lender panel
The lender panel is the list of banks brokers can access. To determine if a broker is good, he or she must have a wide range of lenders on their panel. You’ll find that some brokers have over 50, while a broker that has a limited number is an indicator that the broker only focuses on a small variety of lenders, which could be limiting for you. Finance brokerage Precision Funding (website) notes that the panel size of a brokerage is important because this increases the options and likelihood of you being provided with the most suitable loan option for your scenario.
7) Check ownership structure
Most of the time, brokers are owned or part-owned by huge banks. As mentioned, their ties to these banks may provide you with biased opinions because they will likely sell you loans that flow through the bank that owns the brokerage.
Finding the right mortgage broker is crucial; hence, you have to do your due diligence. Purchasing a home is one of the most significant investments that you can make, so make sure not to cut any corners when doing your research and interviewing brokers. A mortgage broker is an invaluable member of your team, so choose the best one that will suit your needs.
