What should you expect when meeting a mortgage broker?

1. What should you expect when meeting a mortgage broker?

Searching for a “mortgage broker near me” usually means you are ready to obtain direct help with a home purchase, refinance or investment loan.

A broker does not need to be located in your suburb. Many applications are completed by phone, video meeting and secure document exchange. The more important questions are whether the broker is appropriately authorised, understands your circumstances and can access lenders relevant to your needs.

What does a mortgage broker do?

A mortgage broker acts as an intermediary between borrowers and lenders.

A broker may help you:

• understand your borrowing position
• clarify your requirements and objectives
• compare loan options from their lender panel
• calculate indicative repayments
• explain loan features and costs
• prepare and lodge an application
• communicate with the lender
• assist through approval and settlement.

ASIC’s Moneysmart explains that mortgage brokers must act in a consumer’s best interests when recommending a home loan.

What happens during the first meeting?

The broker will generally ask about:

• what you want to achieve
• the property or loan purpose
• your preferred timing
• income and employment
• regular expenses
• current debts
• assets and savings
• credit history
• future changes that may affect repayments
• loan features that matter to you.

These questions allow the broker to understand your position and meet their credit-assistance obligations.

Documents you may need

Depending on your circumstances, documents may include:

• identification
• recent payslips
• bank statements
• loan and credit card statements
• evidence of savings
• rental statements
• employment contracts
• tax returns
• notices of assessment
• business financial statements
• property contracts
• council rates notices.

Self-employed, trust, company or complex-income applicants may require additional information.

Questions to ask the broker

Ask:

• Are you authorised under an Australian credit licence?
• Which lenders are on your panel?
• Are there relevant lenders you cannot access?
• How are you paid?
• Will I pay a broker fee?
• Why is the recommended loan in my best interests?
• What alternatives were considered?
• What fees and risks should I understand?
• Who will manage the application?
• What support is available after settlement?

How brokers are paid

Many mortgage brokers receive commission from the lender following settlement. Some may also charge a client fee, particularly for specialised or complex work.

The broker should provide disclosure documents explaining applicable commissions, fees and relationships.

A lender paying commission does not remove the broker’s obligation to act in the consumer’s best interests when providing relevant credit assistance.

Local knowledge versus lender knowledge

A local broker may understand nearby property markets and professional networks. However, lender policy knowledge, responsiveness, experience and the quality of the assessment may be equally important.

For specialist areas such as self-employment, trusts, construction, investment property or SMSF lending, relevant experience may be more important than physical proximity.

Before signing anything

Make sure you understand:

• the loan amount and term
• repayment type
• fixed or variable structure
• interest rate and comparison rate
• fees
• offset and redraw arrangements
• security properties
• guarantees
• conditions of approval.

Do not sign incomplete documents or provide inaccurate information.

Find an experienced mortgage broker

Call to action: finweb can connect you with an experienced mortgage broker who can meet with you in person or remotely and assess options relevant to your circumstances.

*General information only. A broker’s lender panel does not represent every product in the market. Credit is subject to lender criteria and approval.*