Buying property– whether it’s your first home or an investment purchase, is a large financial commitment. Securing timely and affordable finance is a key element in fulfilling your property aspirations. You could make your property buying journey smoother and hassle-free with the guidance of a professional mortgage broker. However, you need to find the right mortgage broker and make the most of their services. To help you tell if your broker is providing you with the proper support you need, we’ve put together a quick list of things you need to look out for as well as the redressal tools should things go awry.
1) Reviews and Ratings
While the best approach would be to go with a broker with good word of mouth, especially from family, friends, or known acquaintances, you could also rely on online research. Interact with brokers with many good reviews and ratings to get a feeler for who could be the right option for you.
Check if your broker is a licensed one. He/she should either have an Australian credit license or be an authorised representative of an established financial institution. This ensures that your broker has the minimum educational qualifications to provide you with the right home loan advice and expertise.
3) Clarity on fees
Most brokers receive a commission from lenders upon settlement of a loan. Their services are therefore generally free for borrowers with a few exceptions like a very minimal loan amount or a longer than usual application process. Additionally, a broker continues to receive a trail commission from the lender throughout the life of a loan so that he/she continues to assist the borrower till the loan tenure ends. The larger the loan amount, the larger the commission and trail. While broker services are generally free for borrowers, in the rare circumstance of an involved fee, your broker should be upfront about it and should begin proceedings only after your consent. A good broker will not let the commission and trail influence his/her recommendation of the right loan amount.
4) No bias for parent institution loans
Mortgage broking establishments have multiple ownership structures. Some brokers run self-owned businesses while others are part of an established mortgage broking chain. There is a possibility that mortgage establishments owned by large banks or a single financial institution may be biased in their recommendations. This may not always be the case. But if you feel that a large majority of recommendations your broker is providing you are for loans from the parent institution then voice it and ask for a justification. If you see no change or are not satisfied with the explanation your get, it’s best to go with another broker.
5) Adequate justification and explanation
While the home loan journey for each borrower is unique, there are certain steps most brokers follow.
- Initial introduction
- Thorough Analysis of your circumstances and personal finances
- Loan Recommendations
- Loan Selection
- Application Submission
All through these stages, a good broker will provide you with adequate justification, explanation and keep you posted of your progress at each stage. He/she will also continue to manage and monitor your loan post settlement as well. Finally, your broker will also provide you with a ‘Credit guide’ that will spell out your rights as a borrower, provide details on loan commission and trail as well as detail out the complaint resolution process in case you are not satisfied with their services.
6) Proactive written communication
You should proactively receive all necessary written communication like
- Your credit assessment
- A lender approval in case your loan progresses to next stage
Your broker will advise you to proceed with committing to any property purchase only after he/she shares written and formal approvals with you.
As far as complain resolutions are concerned, if your broker is part of an established mortgage broking establishment chain, your first point of contact is the organisation’s in-house complain resolution team. All complain teams have a specified resolution period that will be mentioned in the ‘Credit guide’ along with contact details of how to reach them. In case the complains team is unsuccessful in resolving your issue, you could approach the AFCA (Australian Finance Complaint Authority) for the next steps. However, please keep in mind that reaching out to the in-house complains and seeking their assistance first is necessary before contacting AFCA.
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he information is a compilation from various sources for your benefit and should not be relied upon in lieu of appropriate professional advice.