The mortgage industry has undergone incredible change since brokers first started offering their services almost two decades ago.
And while mortgage competition, the GFC and national regulation have all played a part in shaping the profession, at the heart of it the benefit brokers give to home loan customers is still the same – choice.
For home loan borrowers wading through the numerous loan options on offer can be time consuming and confusing. But mortgage brokers can help clients find a suitable loan for relatively little or no cost.
According to the MFAA, the peak industry body for mortgage professionals, there are approximately 12,000 independent mortgage brokers currently operating in Australia.
Here’s a guide to finding the right professional for you:
1.) Licensed: As of 1 July, all credit providers must be licensed with ASIC. Licensed professionals are required to adhere to the National Consumer Credit Protection act.
2.) Member of a professional industry association: Members of the MFAA must comply with a Code of Conduct and meet strict educational standards. Many are also members of the FBAA.
3.) Comes recommended: The majority of mortgage brokers receive business through referrals. Ask your friends and family about their experience with their broker and get a recommendation.
4.) Thorough interview process: Finding a cheap rate is only one aspect of arranging a loan. A skilled mortgage broker will sit down with you to discuss your mortgage plan and goals and find a loan that is most appropriate for your situation.
5.) Utilises a large panel of lenders: Some brokers have key relationships with a small number of lenders and tend to place customers with lenders that they are most comfortable with. But a competent broker will not only hold accreditation with a large panel of lenders, they will be familiar with the lending criteria and processes of numerous financial institutions.
6.) Excellent communicator: Applying for a home loan or refinancing can be extremely stressful, however good brokers will keep in contact with the borrower to keep them in the loop throughout the process. Diligent brokers will also keep in contact upon completion to give clients updates and news that may be of interest.
7.) Discloses all fees and costs upfront: Mortgage brokers work on commission, which means they receive a percentage from the lender after placing your loan. For the most part, this means they offer their services to customers free of charge. However, this is changing as more brokers are altering their service proposition and charging a fee for that service. Borrowers should always be informed of any fees associated with the broker during their initial contact.
8.) Sees you as a life-long customer, not a one-off transaction: For most Australians, a mortgage is a life-long commitment. A good broker will recognize that your needs and goals will change over time and endeavor to help you along the way.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan