Recent scrutiny of mortgage brokers in Australia has some buyers concerned. Therefore, it’s very important to find the right broker who will actually help you throughout your home buying journey from initial home hunting to choosing a home loan and explaining the benefits of choosing variable rate home loans, fixed or other types of loan applicable to you.
Signing up to a home loan is a daunting task, even to seasoned home buyers/investors. Sifting through thousands of different mortgage products to find the right deal is a tough call, what more if it’s your first time, right?
There are currently thousands of home loans on Australia’s property market, according to financial comparison site Canstar. This overwhelming choice means about one in two mortgage customers will hire a broker to help them find the right loan. Most brokers have access to about 90 percent of products on offer and they normally receive commissions from the credit provider that supplies the loan.
With rates continuing to fall, it’s never a better time to borrow for a home, but with more than 13,000 mortgage brokers operating in Australia, how do you choose the one that will work best in your interest?
Here are some considerations:
Test the waters. With brokers, you can take your pick and try before you commit full time. It’s common for mortgage clients to test the waters and get in touch with multiple brokers before deciding which one to go with.
Usually, a client will see at least two or three different brokers when they’re moving forward on a home loan application. They will then choose who they want to go with. Always look for a broker who listens to your goals and preferences. At the very least you need to feel comfortable working with the broker on your transaction as well as in the future.
Recommendation/word of mouth. The Mortgage and Finance Association of Australia simply advice that when you’re on the hunt for a broker, you simply need to ask around. Most people, especially those who have successfully purchased a home through the use of a broker will be more than happy to share their experience with their broker.
Also, if you use social media, you can put a message out there and ask people if they’ve used and can recommend a broker. A broker’s business is pretty much around referral from friends or family.
Check for legitimacy. You can check if the broker is licensed by searching ASIC Connect’s Professional Registers to ensure that your credit provider is legit. You can phone ASIC’s Infoline on 1300 300 630. Alternatively, check the MFAA website to find an approved credit adviser.
Do your own research. Make it a point to study first and gain some knowledge about the home you want, its community, and loan types, particularly the interest rates before going to the broker. This will help you communicate your preferences better as well as allow the broker to work on your demands efficiently.
Of course, you can also go directly to any loan providers by yourself if you already know what you’re doing. You can visit the lender’s website and read up on the benefits of choosing variable rate home loans or any other type of loan you are interested in.
Once again, always check the broker or the company they are dealing with for legitimacy. Best of luck!