The word Mortgage is derived from a French word meaning DEATH. Truly, for some borrowers, it becomes a matter of life and death being able to hire a good mortgage broker.
It’s not that you don’t find a broker; in fact, you find too many and that’s the real problem. Among many service providers, advertising and highlighting their uniqueness and usefulness how to find a good broker?
I’ll provide the answer, step-by-step.
When are mortgage brokers essential?
It is true that with time, the home loan application procedure is getting complicated not only in Australia but worldwide. This explains why mortgage broker is a profession of so much importance in today’s world.
What a mortgage broker really does is shopping rates for you and negotiating a mortgage with a lender. He eventually does everything that otherwise you had to do on your own for finalizing a competitive rate.
They have the required know-how as well as good rapport with different lenders. These are the reasons they can easily find the best deal for you.
Still, do we all need one? Certainly not!!!
You must hire a broker, only if
- Your case is other than first-time buying or remortgaging.
- You don’t have the time and interest to shop multiple lenders.
- You lack the confidence to analyze and compare mortgage terms of different lenders.
- Your credit score is quite low.
- You want rates from the banks that talk only to brokers.
- You are in need of advice and guidance.
- You need to settle a mortgage fast.
- You intend to buy a property that banks are not keen to finance.
- You have an eye on banks’ exclusive deals.
The secret of finding a good mortgage broker
You can’t hire the very first broker you come across. Not all but some of the brokers in the country are involved in different malpractices and that’s why it is important to be watchful when hiring.
Shortly, you’ll come to know the common problems that you’re going to face if you, by any chance, hire a wrong person. Don’t get scared!! I will also reveal the criteria alongside that help you pick a good mortgage broker.
No go for a broker who is not licensed. Look if the mortgage broker is registered with the Australian Securities and Investment Commission.
The government has now made it mandatory for every broker in business to register with ASIC. The license is provided after thoroughly checking a broker’s qualification and previous professional reputation.
Never hire a broker if his license has expired or canceled. This means that broker is currently not under regulations.
Also, check if the broker is a member of professional associations in the industry like MFAA or FBAA. As such memberships demand very high degree to professional qualifications this is a good criterion to judge a broker’s competencies.
Give value to personal experiences. Ask your friends or family members if they have ever done any business with any mortgage broker. If they are recommending any broker, there is no harm in trying him.
Have chosen a broker from Google search results? Never mind. Contact him and request him to send the contact details of some of his previous clients.
You can also make an independent research. Go to the relevant online forums and ask people about the broker’ reputation.
Caution: Never rely on the recommendations that you can see on broker’s website.
What some brokers are lacking in their business today is the transparency of fees. Borrowers often come to ASIC complaining about brokers’ hidden charges.
Don’t fall in the trap. From the very first day, try to get a clear understanding of the fees and commissions that the broker is going to charge for his service. Make sure, that his contract states clearly the charges and there are no clauses like if, but, when etc. A Broker with no hidden charges is a clear choice.
You are in luck that there are brokers like BrokerCo Mortgage Brokers, offering you free strategy sessions. Instead of snatching money from your pocket, they are more interested in understanding your requirements and discussing possible solutions.
Never choose a broker with a limited panel of lenders. A good broker must have access to a large number of lenders so that he can shop varieties of rates for you.
But this is not always the case with young and inexperienced brokers. Large banks and other reputed credit institutions don’t generally work with them.
This is where license comes into play again. If your broker is not properly licensed, most of the lending institutions are going to shut their doors on his face.
Comparing only a few lenders then he will end up finalizing a sub-optimal mortgage for you.
A good mortgage broker is also a good communicator. From the very first meeting, he discusses things clearly and gives you only real estimates. Needless to say, he ought to be a friendly personality whom you can trust to give your financial information.
No matter if it is your first-time loan or a refinancing, he must be there throughout the mortgage finalizing process informing and updating you about the gradual progress.
If he is a good communicator, you can easily expect him to be a better negotiator. The chance is very high that he is in good relationship with the key lenders in the market, thereby negotiating an outstanding rate for you.
Not every lender offers the same amount of commission to a broker. This commission also varies with the amount of loan sanctioned. These two factors generate a tendency in some broker to manipulate the negotiation such a way that they get the highest commission.
Before hiring a broker, make sure that he has no past history of doing such unethical practices.
In the past decade, the mortgage industry in Australia has undergone considerable changes, making it a safer playground for borrowers. Just keep your eyes open and dive in.
Now you know how to do it. Don’t you?