The Australian Securities and Investment Commission (ASIC) introduced a new consumer credit law that imposes transparent customer service and responsible lending of credit service providers including credit lenders and mortgage brokers towards clients.
A recent survey found that 40 percent of first homeowners favoured the services of their mortgage broker in terms of selecting mortgage options and guidance. This is one of the reasons why mortgage brokers are regarded as the most reliable source of information when it comes to home loans. The survey also pointed out that most home loans in Australia are supplied by mortgage brokers.
How to Choose the Right Mortgage Broker
There are a lot of things that you need to consider in choosing a mortgage broker. Doing a research can be very helpful and it will help you determine which broker stands out among the others.
Using the checklist below will help you assess the skills and experience of a mortgage broker. A reliable mortgage broker can answer these important questions and will handle you professionally.
Find out if your mortgage broker can answer questions related to:
- Service Standard
- Type of home loan products
- Range of Lenders
- Expertise and Years of Experience in the business
- Commission Arrangements
- Work Ethics
Question 1: Is your mortgage broker working to meet your best interests? Consider some of these questions:
- Does your broker get the same rate of commission regardless of what kind of loan product or loan provider do you choose?
- Does your broker have their own loan products? (If they recommend a particular home loan product to you, ask WHY?)
- Does your broker receive any referral fees or any remuneration for introducing products to a customer?
- Does your broker know your financial capabilities?
- Does your broker have a Finance Broking Agreement and a Customer Charter which includes the statements of resolution and policy in case of disputes, remuneration, and service levels?
Question 2: Can your Mortgage broker explain the following:
- The importance of each home loan product and why are they suitable for you and why others are not?
- What will be involved during the home loan process starting from the application, meeting with loan providers, up to the settlement?
- How much will be the commission? And how are they calculated?