Which mortgage broker should I choose?
Tuesday, 27 July 2010
THERE’S been a fair shake-up of transparency laws surrounding credit agencies lately, so in this new operating environment, how do you sort the wheat from the chaff? Mortgage Choice has a simple checklist you should check out before committing to a mortgage broker.
New uniform consumer credit laws governed by the Australian Securities and Investments Commission have been introduced to ensure all credit lenders and service providers, such as mortgage brokers, engage in responsible lending and transparent customer service.
So, how can potential borrowers separate the best brokers from the rest?
According to Mortgage Choice, would-be borrowers should be prepared to question important aspects of a mortgage broker’s service and gain a thorough insight into the value of their offering.
Mortgage Choice spokesperson Kristy Sheppard said borrowers can achieve the best results in an increasingly competitive mortgage market, saving time, effort, confusion and even money, by shopping around for a home loan deal.
“Mortgage brokers are a valuable source of information and assistance, which is why a recent Mortgage Choice survey found 41% of new first homeowners said their mortgage broker was their favoured point of contact for mortgage guidance. In fact, approximately 40% of all new home loans in Australia are now sourced by brokers,” she said.
“It can be daunting to figure out how to find one that suits your needs. Do a little homework so you know what sets one mortgage broker and their business apart from others.
“Questions should be asked about their service standards, training, accreditation, range of lenders and products, experience, ethics and commission structure. You should also check if they have their own products and, if so, why they put them forward as suitable.”
Mortgage Choice offers the following checklist to help borrowers find a professional mortgage broker.
Is the broker working in your best interests?
Do they receive the same commission rate regardless of lender or product chosen?
If they have branded products of their own, do they have clear reasons for recommending those products over others?
Have they disclosed alternative forms of remuneration and any referral fees paid for customer introductions?
Have they looked into your ability to repay the loan amount?
Do they have a Customer Charter and Finance Broking Agreement that clearly outlines their service levels, remuneration and dispute resolution policy?
Can the broker clearly explain loan processes in writing?
Can they explain why the loan products they suggest are suitable for you and why others are not?
Will you receive an explanation of the process the application will take from enquiry to settlement, including loan processing times?
Do they provide full disclosure of commissions received and how they are calculated?
Can they give you a written complaints procedure and privacy policy?
Can the broker demonstrate professional standards?
Are they compliant with the National Consumer Credit Protection legislation?
Have they completed an accredited mortgage broking training course, including qualifications for Certificate IV in Financial Services (Finance and Mortgage Broking)?
Do they carry adequate professional indemnity insurance?
Are they a Mortgage & Finance Association of Australia member and do they comply with its Code of Practice?
Can they offer real choice of home loans?
Do they have access to at least 15 lenders, ranging from big banks to smaller banks, building societies, credit unions, etc, on their panel?
Will you receive a written comparison of loan options including upfront, ongoing and exit fees?
Is the broker’s advice and service at no cost to you?
Outside of the normal home loan application fees, will the broker’s service be at no cost to you?
It can be daunting to figure out how to find one that suits your needs. Do a little homework so you know what sets one mortgage broker and their business apart from others.
Send to Friend
Printable Version
