Undoubtedly buying a home will be the biggest purchase by most Australians in their lifetime. The reason is that the funding required is usually considerable, the time for repayment is usually a few decades, the home itself becomes a major investment for the proud homeowner (hopefully a good one) and, yes, of course – you get to enjoy the comfort of living in your own home.

So how should you go about approaching such an important event?

Surely you will need some qualified help and consultation, especially when we are speaking about the complex matters of arranging a loan and financing your home purchase. The variables here are so many that it never pays off to do it by yourself. In Brisbane, these experts are usually referred to as home loan brokers or mortgage brokers. 

Finding a mortgage broker in Brisbane is not difficult. However, finding a good one requires some effort. And when we consider the importance of his support, it is compulsory that you choose well. Here are the 5 most important things to review when looking for this broker, who’s advice and assistance will have implications on, more or less, the rest of your life.

Are They Licensed? 

You could ask friends and family for credit advice, and most likely they will render it. The important thing to know is – are they qualified? When choosing the person or company who will consult us on the important matters of home loans, it is important to have a qualified broker.

Fortunately, the Australian Securities and Investment Commission (ASIC) issues certificates just for this purpose. This is the Australian Credit License (ACL) or the Australian Financial Services (AFS) license. Australian law stipulates that each person who is “acting as an intermediary between a creditor and a consumer” should hold an ACL. By issuing such licenses, the Commission, as the regulating body of the industry, certifies that the holder of the license:

• has the necessary qualification,
• has undergone rigorous specialised training, 
• has held successfully the relevant exams,  
• regularly maintains his professional competence and
• adheres to the Financial Planner and Advisor Code of Ethics.

Hence a holder of an ASIC license is deemed qualified to render financial advice.

This is a good starting point, however, it is not enough. The home loan broker may be licensed, but does he provide a good service? 

Membership in the Mortgage and Finance Association of Australia (MFAA) or The Financial Brokers Association of Australia (FBAA). These are the two largest organisations of home loan professionals. Membership in one of them or both suggests that their peers acknowledge them as financial consultants. What you may be on the lookout for is the annual prize awards of these organisations. They truly certify to industry excellence, especially if they are from recent years.  

What Are The Offered Services?

You will be paying for the advice of the home brokers one way or another (either by a direct commission or by the lender, as a percent of the borrowed amount). If you are paying it is reasonable to know what you are paying for.

Ask your mortgage broker-to-be:

What Do Their Services Include?

Your broker should be able to listen to you, understand what your needs are, and make a rough evaluation of what lenders will be willing to accept, or what you will be able to borrow. Then they should be able to provide a range of options which are fulfilling your needs and explain to you how each option works and what are its pros and cons. 

The answer here should include advice on reasonable lenders, support with the collection of documents, support with the credit application and negotiations if need be, draft and consulting on all the necessary documents around the home purchase and credit disbursal.

What Sets Him Apart From The Other Intermediaries?

According to MFAA, there are over 16 000 mortgage brokers across Australia, and a good quarter of them work in and around Brisbane. The good ones will provide all of the above services. So why should you choose to work with any of them in particular? Ask the question and then listen to their story. 

They may have some extra line of specialisation, which is important to you – say, a specialist in first home buyers, or guarantor home loans, or finance within a specific area of the city. Then again the broker may be offering some extra services. Either way, it is worth knowing and utilising. If they have nothing of substance to say – just move to the next mortgage broker in line.

Does He Provide A Selection Of Lenders?

Having the option to choose is important. Having the option to choose when you are making one of the most important decisions in your life is vital. What you have to be aware of is that some licensed home brokers are working for only one credit institution. If this is the case, it will be impossible to offer a custom solution to your particular needs. Such brokers are applying the one-size-fits-all approach. 

Never settle for a broker who will not provide less than, at the very least, – three acceptable solutions.

What Experience Do They Have?

Licenses and training are not all. What is also important for your home loan broker to have is experience. Pop the question and then check the answer.

How can you do it? 

Easy. Just review his loan portfolio and case studies. Now notice when was his first successful deal. Are these case studies similar, or are they dispersed over a wide range of customers, lenders, and services? The more experience your broker has – the better broker he will be for you.

This is important as experienced mortgage brokers with an extensive portfolio will have more answers to your questions and provide a wider range of solutions. Never underestimate experience in this line of work and seek out the best. 

Is It A Company?

A mortgage broker may be a personal title. Or it may be that of a brokerage company. Make sure that you will be working with a corporate entity, rather than a one-man show. What corporate brokers have, and usually individual brokers do not, is considerable competence in more than one field – legal frame, financial frame, investment considerations, urban development expectations, etc. Though possible for an individual to be an expert in all these fields, chances are that there will be something missing. 

Look for a brokerage company, not a broker-person.

What Are The Commissions?

It is reasonable that each service is paid for. Normally mortgage brokers will be earning their keep from the lenders, whose products they have helped to sell. This would mean “free” for you. However, there are also mortgage brokers who charge for their services. You need to get this question out of the way, just so that you evade any unpleasant surprises.

Now you know the five most important questions which you need to answer when selecting your Brisbane-based mortgage broker. Never underestimate any of these questions, but most importantly notice the broker’s initial responses and the feeling he is leaving in you. Does he listen? Is he trying to understand your needs? Will he be able to provide reasonable financial offers for your needs? 

Take your time and choose wisely. This will have implications in the decades to come.