Many Australians think that they can find a mortgage with the best rates and terms for their situation by going to their bank or preferred lender. On occasion, your lender will actually have the best mortgage for your situation. But the odds are that they won’t.
Look at the situation mathematically. If a mortgage broker has access to more than twenty different lenders and you are seeing one lender, who is most likely to find the terms and rates that are best for you?
Why You Should Choose Your Mortgage Broker Carefully
Finding the right mortgage isn’t easy. Lenders often vacillate between strict guidelines and borrower-friendly standards. Some lenders use tactics that can not only cost you money, but can compromise your standard of living and affect your ability to obtain future loans.
Some mortgage brokers do things the right way. They know their market like the back of their hands and do their due diligence in the beginning with their clients, obtaining exactly the information they need to figure out which lenders will be appropriate for any given client. Then, they will apply only to those lenders.
Other mortgage brokers obtain basic information and then use the “shotgun approach,” sending loan applications to every lender on their roster. If you get turned down by a few of them, it can damage your credit score. In addition, the wrong mortgage broker is less likely to find the best product for you. This can cost you thousands of dollars over the full term of a home loan.
In other words, you don’t want just any mortgage broker; you want a great mortgage broker who will do their homework and find the best loan for you.
Qualities of a Great Mortgage Broker
Luckily, great mortgage brokers display two qualities that make them easy to spot if you know what you are looking for. The first quality you want to see is a proven track record for integrity. The second is a proven track record of success.
Integrity is important in any business person, but especially in a mortgage broker. You want a broker who has developed an honourable reputation in the mortgage business. If you can’t trust your mortgage broker, don’t do business with them.
For example, many mortgage brokers will quote you rates without first obtaining sufficient information from you.
Some brokers want to take minimal information and pull your credit shortly after you walk in the door or call them on the phone. This is a sure sign that they are taking shortcuts, which never bodes well in the lending business. Some brokers will tell you everything that you want to hear, exactly as you want to hear it. If it’s too good to be true, it’s too good to be true.
Some brokers will ask you for money up front. This should raise a giant red flag. Most reputable mortgage brokers are paid by the lenders and have no reason to collect money from you at all.
If your mortgage broker does any of the things mentioned above, there is a very good chance that they are not the kind of broker you are looking for.
So, how can you find yourself a reputable mortgage broker? First, make sure they are accredited. Next, use Internet search engines such as Google to get an idea of their reputation.
The most reliable indicator, though, is how they treat you. You want a mortgage broker who is going to take the time to learn about you and your financial situation before making any promises or giving any advice. They want to know your goals and your resources so that they can help you make the most out of your situation. Basically, they care.
A successful broker is going to have a wealth of experience in “closing the deal” for his or her clients. Along the way, they will have amassed a lot of knowledge. This presents an opportunity for you to accurately gauge your broker’s level of talent and knowledge by asking questions.
Find out how long they have been in the business. Ask how many mortgages they have obtained for people like you. Ask some general and some specific questions and see how quickly and easily they respond.
At Approved Financial Planners, we have mortgage brokers with track records of integrity and success. Call us for more information: (08) 6462 0888.