Brokers act as the go-between and link potential homeowners to mortgage lenders that are mainly financial institutions. They act as agents for borrowers and look for a good deal for potential homeowners using the information provided to them. Below is some information that will enlighten a first home buyer home loan on roles a broker plays in mortgage transactions.
How a mortgage broker assist clients
A broker should understand the client’s needs, lifestyle, and plans, these aspects will enable the broker seek a mortgage that best fits the needs of the client in question. From these requirements, a broker should inform the client of suitable loan products and the risks under each loan product or scheme. The broker should work with their clients on their budget in arriving at a loan scheme so that the homeowner does not choose a plan that is either too low or too high to achieve.
To prevent mortgage brokers from charging extra commissions to clients, the broker should provide the client with a Finance Broking Agreement during the formative stages of the interviewing process. This document states the expectations of both the broker and the client about the loan applied for. The borrower should read this before signing the loan application.
As such brokers can offer a range of products through the lenders that they are accredited to. Mortgage brokers must have accreditation from bodies such as the Mortgage and Finance Association of Australia (MFAA) must have membership to the Credit Ombudsman Service Limited (COSL) and have a certificate IV in financial services. Homeowners should shop for the right broker by consulting friends and family for brokers they have had experience with.
Factors one should check before settling for a particular broker
A good broker should facilitate consultation with financial advisers on issues of risk and insurance. Potential borrowers should endeavor to speak with several brokers before choosing one. In so doing a borrower is able to assess the broker in terms of how long they have been working in the industry, the kind of loans they are offering and which lenders they can avail or have in their panel.
A good broker would ordinarily have a range of reputable lenders in their panel; borrowers should reconsider brokers who do not have reputable lenders in their panels since this would mean that they might miss better loan deals.
A broker should find the loan plan that best fits the needs of the client and not otherwise. Borrowers should have their mortgage brokers explain to them in simple terms all the documents in their loan application, this protects borrowers from nasty surprises on their loan interest rates or their lender in the future. Borrowers are encouraged to ask as many questions in cases where they need clarity. Borrowers can also ask to read testimonials from people previously served by the broker; this gives useful insight into the sort of broker at hand.