Mortgage Broker Checklist Print this Page

 

If you're planning to use a mortgage broker to help you find the perfect home loan,

there is some information you should find out from your broker before you start.

q      Ask the broker for proof they are a member of the MIAA.

q      Does the broker have professional indemnity insurance?  Make sure they do.  It covers them in the event that they are sued for negligence or breach of professional duty.  This means if you have to take legal action against them for some reason, they will be insured against this.

q      What fee does the broker charge?  Ask the broker to clearly specify what fees and charges you will incur by using their service.  Some brokers charge no fees - they receive a commission from lenders when borrowers take up a loan that was recommended to them.  Others will charge you a one-off fee.

q      How does the broker get paid?  Make sure that the broker does not let the size of the commission they will be paid by a lender cloud their judgement.  While some lenders pay higher commissions, brokers should not favour higher commission-paying lenders over others.

q      Ask the broker how they compare loans and how they determine which loan is best for you.  Comparing loans is not an easy task.  Make sure the broker can provide you with a clear explanation of the methodology and criteria they use.  If they are unable to do this beware, as they may be basing their decision on the size of the commission they will receive.

q      Does the broker have a system of keeping you informed of the progress of your application?

q      Ask the broker what ongoing services they provide after the loan has settled.  All good brokers should provide ongoing support to you after settlement.

q      Which lenders (and which loans) does the broker have on their panel?  Make sure the broker deals with a spread of lender types (banks, mortgage managers and others).  The larger and more varied the array of lenders and the number of loans, the more likely you are to find the most suitable loan for you.

q      Find out the Loan Comparison (or true) rate of the loans (AAPR) recommended to you.  This rate takes into account the loan interest rate as well as upfront and ongoing fees and charges, to give a better indication of the actual cost of a loan.  All brokers should be able to provide you with these rates - if they can't, you should be sceptical.

q      See if the broker is a lender themselves - you don't want a mortgage broker recommending loans to you if they offer their own loans (unless you can be guaranteed that they always recommend the best loans and do not lean towards their own).

q      You are within your rights to ask for proof of professional qualifications, information on the broker's experience or references from other clients.

q      Ask what privacy guidelines they follow when handling your information.  They should comply with the Privacy Act 1988 (Cth) Part 3a - Credit Reporting Provisions and the National Principals for the Fair Handling of Personal Information.

Information supplied by Federation Home Loans

Tel: 07 5451 1566 Fax: 07 5451 1819
Bryant House Suite 2 26 Duporth Ave QLD 4558
PO Box 3566 Caloundra DC QLD 4551
Email: info@fhloans.com Web: www.fhloans.com