Ten questions to ask a Mortgage Loan Broker to make sure that they offer the right Refinance Mortgage Broker Service for you:
1. What range of lending institutions do you as a Refinance Mortgage Broker have on your lending panel?
Make sure that the person you are dealing with is a Mortgage Loan Broker or Mortgage Planner who has access to a panel of lenders as opposed to a Mortgage Representative who only represents one lender and that lender’s range of products.
2. What is the best type of homeloan that would suit my cashflow cycle and financial structure?
Make sure that the refinance mortgage broker or mortgage planner demonstrates how the particular type of homeloan will support your financial structure and maximise the use of your cashflow. It is important that the manner in which the home loan repayments are required to be made does not restrict the effective use of your cashflow in minimising the amount of mortgage interest payable.
3. Is it best to concentrate on the mortgage products with the lowest mortgage interest rates?
If the answer is a definite yes, ask why and proceed with caution! There is nothing wrong with low mortgage interest rates provided the lender displays a track record of low interest rates and stable funding! Mortgage products that seem to offer a great deal may contain high penalties, fees and charges, or may not offer the flexibility of use that you require in the future.
To avoid taking out a loan you might later regret, treat with caution a recommendation based mainly on low interest rates.
4. What are the best mortgage loan products to suit my immediate circumstances and goals, and how will they support any future goals I may have?
Make sure the refinance mortgage broker recommendation includes at least 3 mortgage products that have fair comparisons between the products. Beware of a comparison that contains 1 product that appears to be far superior to the other 2! Look for product features and product flexibility that will enable you to adjust the mortgage loan product to meet your future goals and plans.
5. Apart from the fees and charges associated with the new loan, what other fees and charges am I likely to incur?
Financial Institutions, Service Providers and Government Departments often charge fees associated with the lending process and at times can be an expensive surprise for the unwary. A worthwhile Mortgage Loan Broker or Mortgage Planner will supply you with a Loan Costing Sheet itemising all costs, fees & charges associated with the intended loan process.
6. How do you get paid and what is your payment/commission structure?
Requesting an explanation in writing of how your service provider gets paid for their work will help identify and minimise conflicts of interest. If the recommended Lender’s payment or commission is by far the highest remuneration of all lenders on the broker’s lender panel, proceed with caution as this may represent a conflict of interest.
7. Do you present your customers with a Mortgage Broking Agreement?
Not every Refinance Mortgage Broker’s service is explicit in what it will deliver as compared to what it is that you require as an end product. Therefore it is highly recommended that a Mortgage Broking Agreement be drawn up between the parties outlining the scope of services/products to be provided and fees/payments associated with the work.
8. Do you carry out FREE Annual Reviews and what other services do you offer?
Find out how keen the broker is to stay in contact with you and check that your mortgage is meeting with your requirements. What other services does the broker offer either directly or via referral that may be of benefit to you and are there discounts available if you bundle these services with that of the mortgage?
9. Where can I turn if we have a disagreement that cannot be resolved? Do you have an External Dispute Resolution Service (EDRS)?
Ask the service provider to explain the complaints process offered by their business, outlining who you can complain to and which EDRS they are a member of? A worthwhile Refinance Mortgage Broker will present you with a personalised Financial Services Guide at first meeting which will outline all the details of their complaints process as will their Mortgage Broking Agreement.
10. Are you an MFAA certified Mortgage Loan Broker?
By dealing with a broker who is a certified MFAA member, you are dealing with a broker that has satisfied minimum standards of education, experience and ethics to maintain their membership status.
The author of this article, Kevin Roby is the Professional Credit Advisor and Senior Mortgage Planner at Mortgage Refinancing Group Australia and a leading Refinance Mortgage Broker known for his Mortgage Refinancing Tips & Strategies that greatly benefit many Australian homeowners with the successful management of their mortgages.