What to Look for in a Mortgage Broker

I recently needed the services of a mortgage broker and decided to check out the best way of going about finding a reputable one. Here are some tips:
• If you want to track down a good mortgage broker ask your friends if they have had any dealings with one that they could recommend. I asked around and was surprised to find how many of my mates used a mortgage broker when looking for home loan finance. I thought most of them would just go to their bank but all of them said that by using a mortgage broker they had obtained much better home loan finance.
• Once you have a few referrals then give each one of the mortgage broker a call and ask how long they have been in the business. There has recently been a big increase in the number of mortgage brokers in Australia. One mortgage broker I spoke to had only been operating for 6 months and when I asked what his previous job was he said “pastry chef”. It is much wiser to use a mortgage broker who has been in the industry for a long time – they are well established, they have good contacts in the home loan finance space and their knowledge of home loan finance products is extensive.
• Make sure you ask your mortgage broker if he is a member of a professional industry body. He may belong to the Mortgage Finance Association of Australia (MFAA) or the FBAA (Finance Brokers Association of Australia.) If he is a member of the MFAA he or she is required to undergo product training and meet other qualifications before they can become an Accredited Mortgage Consultant. A mortgage broker with MFAA accreditation will generally be more reliable. The other benefit of dealing with an MFAA mortgage broker is that if you have any complaint about that mortgage broker then you have access to the free and independent Credit Ombudsman Services Limited – this is a dispute resolution process that is easily accessible if the mortgage broker does the wrong thing by you.
• Ask the mortgage broker how many lenders and home loan finance products he has access to. The mortgage broker will generally have a wide range of lenders who in turn provide an even wider range of home loan finance facilities. A good mortgage broker will be able to quickly identify the home loan finance that is best suited for your immediate and longer term needs. It is important that you check with the mortgage broker that the home loan finance he recommends is flexible and competitively priced. Don’t always think that the cheapest home loan is the best for you. Quite often a cheap home loan rate means your flexibility is limited because the home loan finance does not come with features that you may not need right now, but down the track can be useful. For example is the prodcut recommended by the mortgage broker one that allows you to salary credit? Can you make additional repayments of principal even though the mortgage broker has suggested you take a fixed rate mortgage. Some home loan finance will not provide you with the ability to make additional repayments while in fixed rate.
I hope these tips are of use to you when you are looking for a home loan – most people these days do use a mortgage broker and there is a good reason for it – they end up with better home loan finance and quite often at a lower interest rate.

Mark Bona is the managing director of My Choice Finance, the company is a mortgage broker offering cheap home loan and home loan finance.

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