7 Questions You Must Ask Your Mortgage Broker

Your mortgage may be one of the biggest financial commitments you will ever make. Therefore, it is important to ask your mortgage broker as many questions as possible to make sure he/she will have your best interest at heart. It is also important to clearly communicate with your mortgage broker your goals and the kind of lifestyle you want to have, and honestly answer any questions your broker asks you, so he/she can accurately assess your situation and recommend a home loan that suits your needs.

1. Do you have your own loan products?

If a mortgage broker is also a lender that has their own home loan product, you will need to be cautious, as they are likely to sell you their own products. They may have other lenders on their panel but do not be surprised that they may promote their products to be better than other lenders, in some cases this is considered ok, but get the right comparison. Make sure you ask them to compare all the hidden costs and benefits of different loans so you can make an informed decision yourself.

Some other brokers are owned or partly owned by some lenders and have their own loan products which are funded by those lenders. It’s important to work with an independent mortgage broker who’ll have your best interest at heart.

2. How long have you been a mortgage broker?

An experienced and professional mortgage broker can save you time and money but an inexperienced mortgage broker may waste your much precious time and opportunity, and bring you more headaches than you need, and in some cases put you in a worse position. Buying a property and getting a loan can be stressful, you need a mortgage broker who can ease your burdens and make your life easier.

3. How many lenders do you have on your panel?

Some brokers may have over 15 different banks and non-bank lenders on their book, whilst others may only deal with one or two banks. More lenders mean more choice, but be careful with brokers who deal with too many lenders as they may not know all their products well. If a broker mentions he has around 20 lenders to choose from, that is a good sign.

4. Is your service free? How do you get paid?

Mortgage Brokers service is usually free as they are paid a commission by the bank, this is the same as a lender paying for branches and staff. But some brokers do charge a FEE FOR SERVICE unless outlined and put in writing, you need to ensure it is explained upfront.

Good mortgage brokers will recommend a suitable loan that benefits their clients rather than the lender that pays the most commission.

Rest assure mortgage brokers’ commission is not coming out of your pocket and in most cases you will be paying less interest than if you deal with the bank directly due to the large volume they do with banks.

5. What loan should I get?

If a mortgage broker does not ask you any questions and offers you a loan product straightaway, RUN! Every person’s situation is different and we all have different goals and lifestyle, there is no one loan that suits every person. Your mortgage broker should ask you a lot of questions to understand your financial and personal situation before making any recommendations on loan products.

6. What do I need to do myself and what will you do for me?

A good mortgage broker will ask you a lot of questions to understand your current situation and assess how much you can borrow and what loans may best suit you. He/she would ask you to prepare a list of documents and will try to get a pre-approval for you first, so you can go to inspections or auctions and make an offer that you can afford. They would walk through the whole process and explain what you need to do and what they will do for you.

A good mortgage broker will do all the leg works for you, research and compare different loan options; negotiate interest rate and terms with the lenders; fill out and submit all the paperwork for you, and follow up with the bank and the other relevant parties to speed up the loan process. If you are ever stuck with anything, you should be able to contact your mortgage brokers.

7. Why should I choose you rather than some other mortgage broker or deal directly with a bank?

Listen to what reasons the broker gives you and make sure you are comfortable with him as a person. You do not want to deal with someone you dislike.