What is an independent mortgage broker?
An independent mortgage broker is a mortgage broker who is not affiliated with any bank, real estate agent, lawyer, accountant, conveyance, or anyone recommending their services for a fee.
A mortgage broker often establishes referral relationships that may involve fees for passing on business details. Many mortgage brokers are recommended but as a borrower, the first question you need to ask is why are you are referring to this mortgage broker?
Mortgage Broker Melbourne What If We Finance, has seen many examples of clients being offered a lending proposal only for the accountant or someone else to say use this mortgage broker.
What may happen is the given mortgage broker may have a commercial relationship the accountant receives a portion of commission or fees that are earned by the mortgage broker. In these instances, you have to ask if this an independent mortgage broker?
Does the accountant or referrer influence their recommendations? Are you really receiving the best advice and does it make sense to mix my accounting and other business?
What to look for in a mortgage broker?
What If We Finance recommends the following key traits to be present in an independent mortgage broker:
- They are not owned (directly or indirectly) by a bank, real estate agent, or any other institution that may impact their judgment and commitment to your needs and goals
- They hold their Credit License. If a mortgage broker is a Credit Representative of another organization they may be influenced by their targets and processes.
- The range of their lending panel. This means how many lenders they have access to. As a rule asks for a minimum of 15 lenders including majors, smaller banks, and online lenders.
- They do not pay anyone to receive your business. For example, an accountant may receive fees for referring you to a mortgage broker.
- They provide a range of lending options and explain in detail why they recommended a given option for example an interest-only loan
- They are MFAA and AFCA This ensures they hold minimum dispute resolution and education standards
- Lender domain knowledge. There is a lot more to lending than an interest rate. They must understand your circumstances and match you to an appropriate lender. For example, if you are a contractor and just entered a new role there is a limited set of lenders we can consider
Things to Consider When Choosing a Mortgage Broker
Getting a mortgage is not something you do every day. That's why it's essential to know how to choose a mortgage broker who will handle all the technicalities and paperwork for you.
When choosing a mortgage broker, here are key factors to consider.
Their lender partnerships and product knowledge
A good mortgage broker will offer appropriate product solutions based on the extensive panel of lenders and loan products available to them. Your broker should have long-standing relationships with reputable lenders and stay updated on the latest loans. This allows them to give you the best solutions for your individual circumstances.
Home loan health checks
An expert broker won't send off loan applications without taking the time to assess your lifestyle and financial situation. This helps them ensure the type of loan and amount you're seeking is in fact the best one for you. Make sure your broker offers free home loan health checks to determine your capability to borrow financially before embarking on the application process.
A successful client-broker relationship is one where you feel confident, comfortable and collaborative. This means your broker genuinely cares about your current loan needs and financial situation. They should also be happy to take the time to explain technical terms or loan jargon. Smart brokers also welcome and even encourage you to ask questions.
When choosing a mortgage broker, look for one who has foresight -- one who focuses not just on the here and now, but also on the future. While your first home loan is a significant step, it can pave the way for future property investments. Therefore, it's good to assess a broker's effort about staying connected with you.
Key questions to ask your mortgage broker
Now that you know how to pick a mortgage broker, it's time to find out the type of questions you should ask them. Asking questions is an effective method that will help you decide on the right mortgage broker for your loan needs.
Take a look at this list of questions to ask a mortgage broker.
What lenders do you work with?
When you choose a mortgage broker, be aware that they either work with a given set of lenders or cast a wider scope. If you want to be thorough, ask your broker about the lenders they work with to see how big their pool is. This allows you to rate shop across a wide array of lenders and find the best loan for your situation.
What is the right type of mortgage for me?
This is one of the most important questions to ask your mortgage broker. Like cars, every type of mortgage will get you to your destination (buying a property). However, each ride will be different. Your broker should have the ability to understand your financial situation before recommending the best mortgage type for you.
The two mentioned above are the essential questions to ask a mortgage advisor but the interrogation doesn't stop there. Other important questions to ask include:
- How long will the process take?
- How will we keep in touch throughout the process?
- What fees and commissions will you charge? Who will pay for them?
- How long of an interest lock do you recommend?
- How many lender quotes did you review before selecting this lender? Why is this lender and rate the best for my situation?
Why What If We Finance?
What If We Finance was established in 2008 and is not owned by any bank or other institution. As your independent mortgage broker, our goal is to find you the best possible deal. Since our inception we have always said not all mortgage brokers are created equal and you can see our video here.
Our sole goal is to help you and we do not pay anyone for your business or receive funds. We only deal with home loans and do not affiliate ourselves with anyone else.
As your independent mortgage broker, we are available 7 days a week and can meet in person, work remotely or over the phone to help you find an unbeatable deal. So contact us today.