13 May What is a Mortgage Broker?
A mortgage broker is a middleman between the borrower and the lender, who negotiates the loan on your behalf. A good mortgage broker should have in depth knowledge about all the lender’s products, processes and their policies. Whether you are looking to buy your first home, or shopping for a portfolio of investment properties, finding the right home loan broker is the first step to finding the right home loan for you and purchasing your dream property.
How to Get the Best Out Of Your Mortgage Broker
As property prices continue to grow, home loans in Sydney have become more expensive. With a 22% increase in 2015 alone most borrowers especially in Sydney are finding it difficult to know which lender will provide them the most cost effective loan and are turning to mortgage brokers for help. Getting a broker to arrange your home loan certainly makes the whole process simpler. However, finding a good home loan broker in Sydney who sticks to the industry’s code of ethics and finds you a good deal without being biased towards the commission being offered can be tricky. As a borrower, your go to home loan broker should be someone who is more of an adviser or educator than a sales person.
Here’s a checklist to help arm you as the borrower with tips to ensure you get the best out of your home loan broker:
Prepare a Set of Questions : Have a set of written questions and phone several brokers and compare their answers before making a choice.
Qualifications: Check if your mortgage professional in Australia is a member of MFAA or FBAA and if they have completed their training courses. Check the website of these associations and ensure your broker is listed.
Lender Panel: A mortgage professional in Australia should have a wide selection of home loans from a wide variety of financiers ranging from banks to non-banks. As you go through the list of lenders check with the broker if there are any preferred lenders and why.
Commissions: Often times, brokers don’t disclose their commission to the consumer unless prompted. Part of your homework should be to find out how much the broker will earn for arranging a loan for you. This helps you make an informed decision on whether a particular recommended loan is influenced by how much the broker will earn.
Research: If you can find out as much as you can about the home loan, make sure you continue to ask the broker lots of questions and make sure they explain things clearly. A broker who gets frustrated or is unclear is often a sign of lack of knowledge.
Explain Your Needs: Give out enough details about yourself to help the broker understand your borrowing needs and financial situation. The broker output can only be as good as the information provided.
Take your Time: Before signing anything, make sure you understand it fully and when in doubt ask the broker to explain further.