10 things to look out for when choosing a mortgage broker

10 things to look out for when choosing a mortgage broker

A mortgage broker is a valuable person to have in your corner when you’re looking to buy a home. They can help you navigate the ins and outs of the market, seek the sharpest home loan rate, and ensure the mortgage application process goes smoothly from start to finish.

However, choosing a mortgage broker isn’t a decision to be taken lightly. Not all brokers are cut from the same cloth, and working with the wrong person can be costly, stressful, and even negatively impact your home loan application.

So how can you separate the best from the rest? Here are 10 things to look out for when selecting a broker to work with.

1. They’re qualified 

First things first, it’s important to check that your broker is legally allowed to advise you on the home loan process. 

At a minimum, mortgage brokers in Australia require a Certificate IV in Finance and Mortgage Broking as stipulated by the Australian Securities and Investments Commission’s Regulatory Guide 206 (ASIC RG 206). However, it’s even better if your broker has additional qualifications, such as a Diploma in Mortgage Management or even a related degree in economics or finance.

On top of this, your broker should have an active Australian Credit Licence (ACL) through ASIC or a credit representative of an ACL holder.

2. They have a wealth of experience

Your home is one of the biggest purchases you’ll ever make in your lifetime, if not the biggest. As such, it’s critical to entrust this financial decision to someone who has a proven track record in helping clients just like you.

Beyond their qualifications, a great broker should bring a wealth of experience to the table. With this know-how, they’ll be able to help you successfully secure the most suitable home loan rate in the market and support you on your application from start to finish.

3. They ask good questions

When are you planning to buy your home? What is your current financial situation? Do you expect it to change in the future? How much have you saved for your deposit? Have you made any big purchases recently, or are you planning to do so in the coming months? These are examples of questions that your broker should be asking during your first consultation.

The first meeting is the discovery or fact-finding where the broker needs to appreciate and understand your goals and objectives. This information will not only help them find the best home loan product for your individual needs, but also ensure that you are in the best position possible to have your application approved and to service your loan. If your broker doesn’t ask these questions before recommending a product to you, you may wind up paying more than you need to in interest, be stuck in the wrong home loan product, experience delays with your application or, worse yet, have your application declined.

4. They have access to a number of different lenders on the market

Invariably, most brokers would have access to 30+ lenders in Australia, each with different interest rates, home loan products and lending policies. The lender you end up choosing could save you tens of thousands of dollars throughout the course of your loan, or open up access to additional features such as a redraw facility, credit card, or additional transaction/savings accounts.

For this reason, the more lenders and home loan products your broker has access to, the better. You’ll have plenty of options on the table and they’ll be able to help you select the best ones for your situation.

5. They’re clear and upfront with you about fees

When you’re purchasing a home, you need to factor in the cost of the property and any renovations you have in mind. However, there are also a number of hidden costs that you should be aware of and plan for before committing to your new home.

These include things like:

• Building insurance
• Lender’s Mortgage Insurance (LMI)
• Stamp duty
• Moving costs
• Rates and strata fees
• Lender fees
• Inspection fees
• Legal fees

All of these can quickly add up, so your mortgage broker should be clear with you on what you can expect to pay and when. In addition to this, a good broker would be able to tell you if there are any government grants that you may be entitled to which could be savings of thousands of dollars.

Last but not least, remember that mortgage brokers are paid by the lenders or banks, not the borrower. This means that in most cases, you shouldn’t be paying anything to access a broker’s services — and if you are, they should be clear and upfront with you about the fees from the get-go.

6. They keep you informed of changes in the market

The property market is always evolving. Interest rates shift, house prices fluctuate, and lenders are constantly introducing new products to entice borrowers just like you. A seasoned broker should stay across these updates and pass on the most relevant information to you. 

Keeping up with market movements can also help you make the right decision for the future. A decrease in home loan interest rates may be the perfect opportunity to consider refinancing, whereas a continued surge in property prices may signal it’s time to invest, upsize or downsize your existing property.

7. They have happy clients

A great mortgage broker should have a number of happy clients under their belt. This is a surefire sign that they’ve helped other borrowers realise their dream of owning a home, and that they’ll be able to do the same for you. Have a look on their website and social media to see what previous clients have to say. If these aren’t available, make sure to ask for testimonials before moving forward with any broker.

Look for feedback like this one from a Rateseeker client:

My experience with Jason has been nothing but positive. I have done a refinance and purchase of a property through him. Both have transitioned smoothly and Jason provided prompt updates along the way. He is very professional, knowledgable and always available for his clients. I genuinely am grateful and thankful to Jason in helping my partner and I secure our dream home! I would definitely use his services again. 10/10.

James M.

Pro tip: if a broker is not willing to share feedback with you or they have negative reviews, consider this a major red flag. Working with an unreliable or untrustworthy broker can create undue stress and negatively affect the outcome of your application.

8. They tell you about the schemes you can take advantage of

Federal and State governments regularly introduce new stimulus measures and grants to support borrowers and investors. If your broker keeps you across these in a timely manner, you’ll be in the best position possible to take advantage of any new schemes that are available to you. 

Grants like the FHLDS often have limited spaces available and are offered on a first-come, first-served basis. If you’re not informed of these updates as soon as they’re introduced, you may miss out on invaluable support for your home loan.

9. They communicate clearly and often

The last thing you want is to send off your mortgage application, then have to chase your broker for updates on what’s happening throughout the process. 

Keep an eye on how your broker communicates with you from the moment you reach out to them. Do they respond quickly and answer any questions you may have? Are you following up with them for more information, or do they keep you abreast of developments as soon as they come through? 

A good broker should always do what they say they’re going to do, ensure you’re informed on the next steps and provide you with updates on the status of your application. 

10. They’re willing to go above and beyond for their clients

Great mortgage brokers value their clients and genuinely want what’s best for them in the long run. That’s why the cream of the crop are willing to help their clients in any way they can, from recommending a conveyancer to staying in touch after you’ve purchased your property. 

If your broker disappears once the settlement process is done and dusted, it may be time to look for another. After all, you never know when you may need their services again.

Looking for a great broker? Talk to the team at Rateseeker.

With access to 30+ of Australia’s leading lenders and decades of experience under our belts, our brokers have what it takes to help you secure the sharpest home loan on the market. Contact us today for a no-obligation consultation and see why so many happy clients have chosen to work with Rateseeker.