Whether it's your first home loan or you're an investor with many properties to your name, one of the first things you'll do when embarking on your next property purchase is choose a mortgage broker.
As the individual who will advise you on the best home loan option for your particular needs, not to mention represent you in negotiations with lenders and deal with paperwork, it's vital the mortgage broker you choose is one you trust. With a few simple steps, you can lessen the chance of having second thoughts down the line in the financing process.
Money isn't so funny
One of the most important things to do when choosing your mortgage broker is finding out how they get paid. Mortgage brokers typically offer their services for free, making their money from commissions on the mortgage and fees.
Before asking "How much can I borrow?", ask "How much is your commission?" You wouldn't want a broker whose judgment is being influenced by a potential hefty pay day. You want them to above all be working for you, not their pay cheque.
Ask them if they charge any fees, and if so, how much? Is the amount fair and reasonable? You may also want to get written confirmation of the amount, so it's set in stone down the line.
Are they qualified?
A good broker should have several years experience and be fully qualified. They should also have a Diploma and a Certificate IV in Financial Services, as well as be a member of the Credit Ombudsmen Service Ltd, the Mortgage and Finance Association of Australia and maybe even the Finance Brokers Association of Australia.
Finally, brokers are legally required to be registered with the Australian Securities and Exchange Commission (ASIC) and have to have either an Australian Credit License or act as a representative for an organisation that has one. You can search ASIC's registers on its official website, at http://www.asic.gov.au/search.
Lend me your ears
It's also important to find out who's on their lending panel. Depending on how many lenders they have relationships with and how reputable they are, you might have struck gold with your broker.
A broker with a number of different lenders is generally the safer option, as less lender choice means you could be missing out on better deals.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.