1. Ask your friends if they know a good mortgage broker?
Start with talking to your friends, family and colleagues to see if they know any great mortgage and finance brokers they have dealt with. It’s fair to say a high number of word of mouth referrals and repeat business is a great sign that the mortgage broker is getting the right outcomes for their clients, but don’t stop there – once you’ve been given a name check out reviews on Google, Product Review and their Facebook page to read other testimonials and case studies to see they are the right fit with what you are wanting to do.
2. Are they qualified and accredited?
You always need to ask for their qualifications and accreditations up front. A good place to start on this is their LinkedIn profile which should list their experience, but at a minimum you should expect them to have a University Degree or a Certificate IV in Mortgage Broking. Equally, they should be licenced by one of the Mortgage Broking industry associations which are FBAA (Finance Brokers Associate of Australia) or the MFAA (Mortgage and Finance Associate of Australia). They should also have a formal complaints process and accreditation through the Financial and Ombudsman Service (FOS) or the Credit Ombudsman Service (COSL).
3. How much experience do they have?
Although a lot can be learned in a degree or formal qualification, there is no substitute for years working in an industry and understanding the various loan structures and products that are available in the market. No computer system or website can compete with the raw knowledge learned by a professional and qualified mortgage broker so make sure to ask how many years experience your broker has, and also how many deals they have had approved and settled within this period – there isn’t much point going with a broker who has been in the industry for 10 years but only had 50 deals approved!
4. What specific areas do they have experience in, and do they specialise?
There are a lot of generalist brokers across the industry and there isn’t much point going with a mortgage broker who only has previously helped first home buyers when you are self-employed and might have a reasonably complicated income situation. Ask them about their history within the industry, other clients they have helped and specific times when they have been able to help clients in similar situations to you.
5. What lenders do they use?
Most mortgage brokers will advertise they have access to over 30 lenders, they generally will only have accreditations held with 2-3 specific banks due to not providing enough volume to the individual lenders meaning you might not have the access to the myriad of lenders that they advertise. You should ask what lenders they predominately use, and if they are only limited to 2 or 3 ask why they don’t use others and how this will help or hinder your situation.
6. How much will it cost you?
In general, mortgage brokers are paid commissions by the various banks and lenders; however, some charge fees as a part of their service. Mortgage brokers are required by law to detail any commission they receive as a part of the process. Unfortunately, some may not disclose this upfront so get on the front foot and ask to make sure the conversation is transparent from the start. The best mortgage brokers may not be the cheapest, or may charge a fee as they can provide more service and professionalism than ones that give away their services for free, because just like any other professional you should expect to be billed for their professional expertise.
7. Who is their typical client or customer?
This ties into their experience and area of specialty from point 4, but it is important to understand what clients they typically deal with. If you aren’t the type of client they normally cater for, you could find that their advice and products aren’t suitable to your situation or they cannot cater for your needs over time.
8. Are they up to date with the changes in the industry?
With the lending policies, rules and the industry changing constantly it is important that your mortgage broker keeps up to date by going to ongoing professional development days. Ask them what professional development courses they are doing, and what else they do to keep up to date with the industry, products and changes going on week to week.
9. Are they independent or is their aggregator owned by a bank?
Many mortgage larger mortgage broking firms such as Aussie Home Loans are owned by banks, in their case Commonwealth Bank but it is important to understand if they are owned of affiliated by any large banks that have their own product lines and if this brings any conflicts of interest to the transaction. Ask them questions about how they recommend products, how they determine if products are suitable.
10. How can they add value and help you grow?
Being the client you need to be put front and centre, and the mortgage broker needs to be able to confirm how they are going to help you not only for this transaction, be it a purchase or refinance but as a client for life – you should ask them questions like how are they going to help you grow, how are they going to help you achieve your goals and structure a loan that works for you now and into the future.
Working with the right mortgage and finance broker is critical to start your property journey on the right footing.