A mortgage broker, we all know what they do….don’t we? How much do we really know about the role of a mortgage broker and what we should look for when seeking the services of a mortgage broker? Whilst we may understand the basic functionality of a mortgage broker, what should we really know about them before engaging in a relationship with a mortgage broker? In other words, as it would apply to all professional service providers, what separates a great mortgage broker from the rest of the field?
A mortgage broker acts as an intermediary between you, the borrower, and the lending institution. They have a panel of lenders that they have accreditation with, meaning they have the right qualifications to sell that lender’s products. A mortgage broker will endeavour to drive the loan application process on your behalf up until settlement of your loan. As a mortgage broker has access to numerous lenders, they should be able to offer you a selection of loan products to assist you in making your final choice. After your loan settles, a mortgage broker should keep in contact with you, updating you on new and innovative products and policies as well as making sure that your loan still suits your needs over time. The reality is that many mortgage brokers have a “set and forget” philosophy in that once the loan is submitted for approval and all information provided to the lender, there is little more for the mortgage broker to do. He will most likely liaise with the lender to ensure the loan gets to settlement but once settled the mortgage broker will have little further input.
When it comes time to select a mortgage broker, your research is vital. Prior to making our selection, here are just some of the criteria you should use to measure a mortgage broker on;
• Are they a member of the Mortgage & Finance Association of Australia (MFAA)?
• What experience and qualifications does the mortgage broker have?
• How does the mortgage broker get paid?
As a Member of the MFAA, the mortgage broker must subscribe to a Code of Practice, must always act in a professional manner and must always remain transparent. It is important for you to know what qualifications or how long the mortgage broker has been in the industry. If nothing else, it instills some confidence in you that the mortgage broker is not simply a “fly by nighter” and has stood the test of time in a very competitive industry. Finally, as a Member of the MFAA, the mortgage broker is required to disclose any commissions received under their Code of Practice.
Whilst we choose a mortgage broker mainly for convenience and added professionalism when selecting a home loan, you should also equip yourself with some basic knowledge of what you require. This will enable you to ask the mortgage broker relevant questions and help you decide on the most suitable product of those recommended by your mortgage broker.
A mortgage broker should provide you with a Finance Broking Contract prior to your final commitment to the loan. You should make yourself aware of the information provided in these contracts and perhaps ask the mortgage broker if such a contract is applicable to your relationship with them.
Importantly, if you feel that your relationship or dealings with a mortgage broker were not up to your expectations, or you feel you were mislead in anyway, there are industry bodies such as the MFAA and COSL (Credit Ombudsman Services Limited) that are there to protect you the consumer.
Vicky Edema has been the Managing Director of Austral Mortgage Corporation since 1992, the company offers a
mortgage broker service which provides borrowers with
access to an expanded offering of loan and lease products.
Austral URL: http://www.australmortgage.com.au
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