7 Things to Consider When Finding a Good Mortgage Broker
Tempted to go straight to your current bank to secure your home loan?
We’re not here to tell you you shouldn’t do it; after all, it is perfectly okay to do so. We’re here to tell you, however, that because every situation is unique and circumstantial, heading straight to your lender may not always pan out. You may actually end up paying more than you realise!
This is where mortgage brokers add the most value. In this article, we’ve put together the top 5 things to look for when choosing a mortgage broker, to make your decision easier.
What Is a Mortgage Broker?
A mortgage broker is someone who helps you get the most out of buying or selling property. They offer guidance on mortgages, loan applications, and other services related to your credit and financial situation.
They’re not aligned with one bank or lender, so they’re able to assess your situation and needs across multiple products. If you do decide to go with a mortgage broker, then finding a mortgage broker to get on board with you is the next challenge.
What Does a Mortgage Broker Do?
Mortgage brokers offer professional financial services and advice to home buyers and property investors. They provide their clients with expert guidance and assistance throughout the entire buying process, from the initial application right through to settlement.
There are several types of finance brokers in Australia. Some specialise in helping people finance property purchases, while others focus on helping people obtain finance for their business, buying a new car or equipment, etc.
Mortgage Broker Qualifications
Mortgage broker qualifications in Australia are tightly regulated to ensure regulatory standards are met. As a minimum, mortgage broker qualifications include:
- A Certificate IV or Diploma in Finance and Mortgage Broking.
- An Australian Credit License (ACL) issued by the Australian Securities and Investments Commission (ASIC).
- Membership in professional organisations, such as the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).
Brokers are also required to engage in continual professional development to stay abreast of industry changes and maintain their mortgage broker qualifications.
It’s worth checking a mortgage broker’s qualifications before engaging their services. This can be done by checking their license details with any professional organisations that they are stated members of. Taking the time to verify a mortgage broker’s qualifications ensures that they’re well-trained, committed to applying industry standards, and will provide ethical and informed financial advice.
Mortgage Broker Experience
Industry experience should be viewed as playing an important role in a mortgage broker’s qualifications. An experienced mortgage broker can also offer valuable information about the Australian finance market. They can also offer valuable insight on the different loans currently available from lenders.
Because they’re constantly helping people buy and sell property, they’ll also be able to provide key insights into the local housing market. They should have contacts within the real estate, conveyancing, and property inspection industries. An established mortgage broker will have expertise based on years of industry practice, something they can use to help you find the best possible home loan for your situation.
How Do Mortgage Brokers Work?
Mortgage brokers play a crucial role in helping buyers get into their dream homes. Essentially, they sell mortgages on behalf of lenders and then manage the entire loan process from start to finish. But how does this process work?
Mortgage brokers are financial intermediaries – you could say they’re like a matchmaker who will help a homebuyer find their perfect lender. A mortgage broker helps borrowers shop around for the best rates and loan terms. They also negotiate lower interest rates and fees directly with the lender. Additionally, a mortgage broker can often provide financing assistance and insurance referrals, so you and your assets stay protected.
When considering how to choose a mortgage broker, it’s important to ask about any potential fees. At North Brisbane Home Loans, our mortgage brokers don’t charge any fees for our services. Instead, we receive a commission payment directly from whichever lender you end up using. This means you get all the benefits associated with having a mortgage broker on your team, but without it costing you any extra.
Why Use a Mortgage Broker?
Why use a mortgage broker when you could just go straight to a bank? This is a question we hear quite a lot. And while there’s nothing inherently wrong with a borrower bypassing a broker to go straight to a lender, it does put them at a certain disadvantage.
For example, say you want to apply for a loan without a broker. Where do you start? You’ll probably begin by jumping online and punching some figures into an online calculator to get a rough idea of your borrowing capacity.
What next? At this point, most people will ask family or friends what they did when they last applied for a home loan. These people likely mean well and will share information they believe is beneficial. But there’s a problem.
The Benefits of Using a Mortgage Broker
The mortgage lending space is very dynamic, and it’s moving all the time. Loan deposit amounts, income policy, appetite from lenders, COVID-19 implications, the benefits of fixed vs. variable…the list goes on and on. Information that was relevant even two years ago is now outdated and may no longer apply. Lending criteria have changed, interest rates have gone up, and borrowing capacity has shifted to a more conservative calculation. It’s a lot for the average person to get their head around.
Fortunately, you don’t have to. A good mortgage broker will already have the latest information on hand and will have observed how the Australian finance and real estate markets have shifted over time. They’ll be able to make educated and up-to-date recommendations based on what will be best for your specific financial situation.
Want to learn more about why you should use a mortgage broker? Watch the video below as our CEO, Pat Cranshaw, explains the benefits of using a broker when purchasing your first property.
How to Choose a Mortgage Broker
Now that you know why to use a mortgage broker, the next step is: How to choose a mortgage broker. Because you don’t want just any mortgage broker. You want to find a mortgage broker who will help you obtain the best possible mortgage to suit your needs.
Fortunately, finding a mortgage broker doesn’t have to be hard. Here are the top 7 things to look for when finding a mortgage broker:
1. You Want Them to Be Thorough
A great mortgage broker will want to get to know you right from the start. The better they understand your current situation and lifestyle, the better equipped they’ll be to make tailored recommendations. If you meet with a broker and they’re rushing to get through the appointment as quickly as possible, that’s not a good sign.
2. Experience Is Essential
When deciding how to choose a mortgage broker, experience should be one of the top things you look for. All brokers have to start somewhere, but a good rule of thumb is to look for a broker with at least five years or more of relevant industry experience. Don’t be afraid to check a mortgage broker’s qualifications, including their credit licence and details of their membership with professional organisations (such as the MFAA or FBAA).
3. Transparency Is Key
When finding a mortgage broker, you want someone who will be open and honest with you. Start by asking them how they get paid. Most Australian mortgage brokers don’t have a fee associated with their services because they’re paid a commission by the lenders once the loan is secured. However, some brokers will still try to charge an upfront fee. It’s also important to know who is on the broker’s lending panel. A diverse lending panel is a great sign, as you know that they won’t just be trying to sell you a “one-size-fits-all” product or the loan they receive the most commission from.
4. They ask LOTS of questions
You want your mortgage broker to be inquisitive about your financial circumstances. They need to have a full understanding of your situation if they’re going to know how best they can help you. Ideally, they should start the conversation by asking questions like:
- Is this your “forever” home?
- Are you planning to renovate and resell?
- How long do you plan to stay at the property?
- Do you currently own another property?
- Have there been any recent changes to your finances?
- Have you been knocked back for a loan before?
- Are you self-employed?
5. Local Market Expertise
Look for a mortgage broker with a strong understanding of the local property market. They should be aware of current trends, pricing and any planned future developments in the areas you’re interested in. Local market expertise can significantly impact the advice you receive, so make sure you’ll be getting the best possible information.
6. Accessibility and Communication
Assess the broker’s accessibility and communication style. A good mortgage broker should be responsive, keeping you informed at every step of the process. Consider their preferred communication channels and response times. Clear and open communication is crucial for a smooth transaction, especially during critical phases like loan approval and settlement.
7. Happy Clients
One of the best ways to find a mortgage broker is by looking at their customer reviews. A reputable mortgage broker will have numerous happy clients who are willing to leave a review for the services they were provided. You can check several different online channels for recent reviews, including Facebook, Google Business Listings, Product Review and Rate My Agent for Mortgage Brokers. North Brisbane Home Loans currently holds a 5.0-star Google rating based on more than 300 unique customer reviews.
Should I Use a Mortgage Broker?
At this point, if you’re still wondering whether or not to use a mortgage broker, ask yourself the following questions:
- Do you want to get the best possible home loan to suit your circumstances?
- Do you want to compare loan products from a wide panel of lenders?
- Do you want access to exclusive offers and possible cashback deals?
- Do you want to take advantage of flexible loan terms or specific loan features?
- Do you want to avoid paying too much for your mortgage?
- Do you want expert advice from someone who is legally obliged to always work in your best interests?
- Do you want your home loan application process to be as quick and stress-free as possible?
- And do you want all of these benefits, without having to pay any extra?
If you answered “yes” to any of the above questions, then a mortgage broker is the obvious solution. At North Brisbane Home Loans, not only do we provide you with the best advice on your home loan needs, but we can also introduce you to our network of trusted partners offering discounted rates.
Need to Find a Mortgage Broker? North Brisbane Home Loans Can Help
Finding a mortgage broker doesn’t need to be a time-consuming or stressful process. If you’re looking for a broker who is professional, friendly and experienced, then you’ve come to the right place. At North Brisbane Home Loans, we have a team made up of the best mortgage brokers in Brisbane.
With a commitment to helping our customers achieve the best possible outcome, every time, you can trust North Brisbane Home Loans to help you get your ideal mortgage with low rates and awesome features. Our brokers can assist you with:
- Buying your first home
- Upgrading to a new home
- Refinancing your existing home loan
- Obtaining an investment loan
Are you ready to start making offers on your dream home? Then book an appointment with North Brisbane Home Loans today. We’ll work hand in hand with you every step of the way.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
