By Eleanore D. Sanchez
Getting everything in order to secure that home mortgage could get overwhelming, so it may be wise have a broker help you along the process, according to the Australian Securities and Investments Commission’s (ASIC) financial literacy website, Money Smart.
Brokers could either help you get financing for your mortgage, or help you with the mortgage process itself. They usually get paid by the lender with commissions when they get you to use their products and services. However, having a broker do all the legwork for you can be limiting sometimes as they may not be motivated to get credit products where they will not earn commission.
To make sure you get the most out of your relationship with your broker, here are a few tips to keep in mind:
- Make sure that the broker is licensed, otherwise they are operating illegally.
- Find out exactly their affiliations so you would know what products and services you are dealing with, and to determine any conflicts of interest about the advice they give you.
- Be specific about your requirements, and ask your broker to find the home mortgage that best meets these needs.
- Don’t feel you have to take all the home mortgage products and features your current broker proffers. Feel free to shop around for other mortgages and phone other brokers for more options.
- Have everything in black and white. Have an agreement written down before you commit to a home mortgage. Never sign blank forms or relegate all the paperwork to your broker.
- Do not sign a business purpose declaration unless you really are using the loan to fund a business and are qualified to claim your repayments as a business expense. By signing the declaration, you are at risk of losing valuable rights under the National Credit Law.
- Do not hesitate to file a complaint should a dispute arise.
“A finance or mortgage broker can save you time and money, but you should still do your own research. Be prepared to ask plenty of questions to help your broker find you a loan that meets your needs and offers value for money,” ASIC concluded.
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