Are you planning to buy a home or finance a business? Then you may need the services of independent finance and mortgage brokers.
These are professionals who do the leg work to find a loan that is most suitable for you. Whether you want an investment property loan, a home loan, or a business loan, the mortgage brokers can find a loan that suits you.
However, can you trust all the finance and mortgage brokers? Do they deliver what they promise? Well, you shouldn’t since there are rogues who are out to fleece innocent people.
Here is what you should look for independent finance and mortgage brokers.
Industry certification shows that the relevant professional body recognizes the finance and mortgage brokers and that they comply with industry standards. In Australia, there is the Finance Brokers Association of Australia Limited and the Mortgage and Finance Association of Australia.
Other than setting the standards in the industry, the association also trains the finance and mortgage brokers.
Check and make sure that the brokers have industry certification, and they are active members.
Essential Qualifications and Licensing
Professional qualifications are essential for finance and mortgage brokers to have since they need knowledge in finance.
A broker should have a minimum of a diploma or certificate IV in finance and mortgage broking to qualify.
Also, check the licensing. A broker should have an Australian Credit Licence from the Australian Securities and Investment Commission. If not, then they are working under a licensee as a Credit Representative.
Finance and mortgage brokers with experience are likely to have faced different loan circumstances such as complex refinancing or poor credit. As such, they would know what to do when faced with other circumstances.
While there may not be a specific cut for years of experience, the recommended is more than five years of experience. However, do not rule out a broker based on experience if you feel they can deliver on their promises.
Nowadays, you can know of a great product or service based on the reviews of other customers. Therefore, a broker may have the qualifications, licencing, and the experience, but other customers may not like the service.
Does the mortgage broker have a good star rating? You can find this out with a simple search on the internet. For example, you can go to a comparison site such as ProductReview.com.au and check the rating. Another option is to search on Google the profile of the business, including the star rating.
A professional independent finance and mortgage broker is not afraid to be rated on such sites. This provides a platform in which they can show their customer satisfaction.
They are really independent
An independent finance and mortgage broker means that they do not favour a particular lender. In some cases, a broker may have a few lenders from whom they receive a lot of commission. They may try only to sell these lenders loans.
However, a good broker should have a diverse lender panel and should choose the lender based on the needs of the client. They should not force you to take a loan from their favourite lender, who gives them more commission since it won’t fit your needs.
You could ask the broker for a breakdown of their lenders and the ones they use most.
Choose a broker who is not working with a single or a few banks but who has a large panel of lenders such as this broker link.
How they do business
How was your first meeting? Did the broker try to know you, or they just pushed a loan on you? Look for a finance and mortgage broker that want to know more about you based on your income and expenses.
The broker could have a questionnaire with the relevant questions that are meant to shed more light about you. These should be questions about your income and expenses. You should find questions about the type of your employment, salary, dependants, and expenses. The questions are there to help the broker to know you better and to determine the kind of loan suitable for you.
If you find a broker who is rushing through the process, then you too, should rush out of their door. They may recommend a loan that is not suitable for you.
Take Time to Explain the Fees
Is the broker coming out clean about the fees? Mortgage brokers in Australia receive their commissions from the lenders. Therefore, if you seek their services, you should not be charged any fees. The broker should let you know about this.
Also, they should explain that you will be charged if you take out a loan. These are costs charged by the lender. Some of these include stamp duty, mortgage insurance if the loan to value is above 80%, borrowing costs, exit fees, and charges for loan features.
A good broker is one who takes time to explain all these fees so that you can know into what you are getting.