What does a mortgage broker actually do? Wanting to use a broker to get that great home loan. What service should they provide and what is required of them? Well, I am glad you asked. Phew!
Your broker should LISTEN to your personal circumstances and requirements. They will offer you a selection of home loans that will suit your needs, and provide a comparison between these products, highlighting the pros and cons of each.
The mortgage broker will actually complete and submit a home loan application on your behalf, and communicate with the lender and yourself until your home loan is approved and settled.
PLEASE ENSURE YOUR BROKER HOLDS AN ASIC AUSTRALIAN CREDIT LICENCE OR IS AN AUTHORISED CREDIT REPRESENTATIVE OF A LICENCE HOLDER.
They are also required to supply you with an Internal Dispute Resolution procedure (A procedure to advise consumers of their complaints process).
All members of the MFAA (Mortgage & Finance Association of Australia), FBAA (Finance Brokers Association of Australia), COSL (Credit Ombudsman Service Limited) and BFSO (Banking and Financial Services Ombudsman) must not only have a procedure in place, but inform their clients of this procedure. It is so very important!
What is a mortgage broking contract?
In many states of Australia it is currently required by law that your broker provide you with this important contract.
The mortgage broker will fill out a Contract which MUST include:
- Loan amount to be obtained.
- Term of the home loan.
- The maximum repayments and all fees.
- The maximum interest rate that is to be paid.
- The date by which finance is to be obtained.
- Acknowledgement that home loan recommendations will be drawn from a range of potential lenders.
- The name and address of your mortgage broker.
- ACN if applicable.
- The name and address of any principals (if trading under a business name).
- Amount of commission payable by the client.
- When and how such commission is payable.
- Statement that financial or other benefits will be received from other than the client (if applicable) including the highest and lowest amount of benefit.
- Disclosure of whether or not the broker can recommend or determine loan conditions and the effect of these.
- Financial or other benefits payable to third parties.
- Any interests or relationships that may influence the brokers recommendation.