Questions to ask your broker
While we make every attempt to communicate the nature of products to you, it's prudent for every borrower to keep their mortgage broker on their toes. The following list was compiled by choice.com.au and republished here as a general guide.
- Do your homework. Research the market first - you'll be better able to assess the recommended loans and quality of advice.
- Prepare questions for the broker. Then phone several brokers to compare what they can offer.
- Check the lender panel. Check which lenders are on the broker's list and ask whether any are usually preferred - and why.
- Check commissions. Find out how and how much the broker will be paid for arranging your loan, including ongoing commissions. Our shadow shop showed that brokers often don't give this information to consumers if they are not prompted.
- Explain your needs. Make sure the broker clearly understands your financial situation and your borrowing needs.
- Understand your options. Ask the broker to explain different mortgage options and why any recommended loan matches your financial needs.
- Find out the refinancing costs. Ask for full details of refinancing costs and make sure they don't outweigh the benefits of switching your mortgage.
Check all calculations ? brokers can make mistakes.
- Ask about rebates. Some brokers refund part of their commission.
- Check credentials. Ask brokers to detail their qualifications and experience. Check if they are a member of the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA) the peak bodies for mortgage brokers.
- Get details in writing. Ask for written reasons for recommendations, and details of commissions, fees and products.
- Don't rush. Don't sign anything you don't fully understand, and if you're in doubt, get independent legal advice.
- Don't overdo your loan applications. Making too many can impair your credit rating.
- Find out how to complain. Check the broker's complaints process and make sure they are part of an external dispute resolution scheme, such as the Credit Ombudsman Service or the Financial Ombudsman Service, both approved by ASIC.