With thousands of mortgage brokers on the market, it’s easy to feel inundated with options (especially if they all sound awfully similar).
As brokers live and breathe home loans, it can be helpful to have one on your side as you embark on your property journey. A decent broker can outline the roadblocks you might face in the home loan application process according to your circumstances. For example, you may be in a partner visa situation or you may have switched jobs multiple times in a short period. Experienced brokers would also know which lenders might be more suitable for your situation.
For those who have never dealt with a broker before, you might feel tempted to walk into your local mortgage broker’s office and give them the job. But remember that the broker you choose will be handling what’s potentially the biggest loan in your life, so no one will blame you for being picky.
If you have no idea what to look for in a mortgage broker, here is a guide to help you get started.
Do your research on home loan options
Before you reach out to anyone, it’s a good idea to familiarise yourself with the various mortgage options if you don’t already have that knowledge. From fixed-rate loans to comparison rates, the world of home loans comes with its own set of rules and jargon. While brokers might be used to explaining things to borrowers, it’s worth your time to study up beforehand so you’re armed with the right knowledge when the broker launches into their spiel.
Once you have done your homework on what’s out there on the market, you might also want to decide which options you would prefer considering your own circumstances. For example, you might want an offset account if you know you will be retaining a fair bit of savings even after stumping up the deposit.
Talk to others who have done it before
If you know someone who has recently gone through the home loan hunting process with a broker, you could ask them about their experience. Ask them what they would do differently if they had the chance to do it again and what are some things they would want in their next broker now that they have the benefit of hindsight. After all, it’s cheaper to learn from other people’s mistakes.
If they had a positive experience, you could potentially consider approaching their broker for a chat.
Don’t just speak to one broker
Making the first step to choose and reach out to a broker may feel draining, but this is often not enough to make a decision. While you might walk away feeling good about the initial chat, it’s never a bad idea to chat to more than one broker. This gives you a few options to compare services and also gives you other brokers to fall back on in case the first one doesn’t work out. It also doesn’t hurt to hear more than one professional opinion.
It’s important not to let the broker do all the talking. Turn up prepared with many questions, especially for the first meeting. And for any loan option the broker puts forward, it’s a good idea to ask them why they recommended this to you, as well as what it could cost you.
So, don’t be afraid to grill them and make sure you are choosing the option that is in your best interest. Remember, the loan is yours to carry for 30 years. Consider asking the following questions to your broker:
1. Who owns your business? Are you owned by any big banks/lenders?
2. What kind of industry training, qualification and professional experience do you have as a broker?
3. How do you decide the loans you recommend me?/Why did you recommend these loans to me?
4. How do you scan the market and how many lenders do you have on your lender panel? Who are they?
5. What kind of commissions do you get paid and by who? And will you charge me any additional fees for your service?
6. Will you pass the clawback fee to me if I refinance later on?
7. Do you have loan options from other lenders you can show me?