the loan
The Age
Saturday March 19, 2011
THOUGH Australia's mortgage-broker industry is still relatively green (IBISWorld's 2011 Mortgage Brokers in Australia Australian Industry Report puts it at 17 years old), the Mortgage Choice 2011 Recent First Home Owner Survey shows 40 per cent of respondents consulted with a mortgage broker for assistance with acquiring their mortgage.But despite the growing influence of mortgage brokers in the sale of mortgage products, the competence levels from one broker to the next varies significantly, according to keyfacts.com.au mortgage educator Michael Lee. And the potential financial ramifications are too important to ignore."They may end up in a loan that costs them $30,000-$40,000 or more too much," he says.The upside is that prospective mortgagees can heed a couple of straightforward steps to make a confident decision about choosing the right broker, Mr Lee adds.The first thing they should do is establish the expectations they have about their ideal mortgage broker these might be that the broker discusses features of available mortgage products with you, provides written loan comparisons and deals with specific lenders and then contact brokers for copies of their professional indemnity insurance (as a condition of full Mortgage & Finance Association of Australia membership, brokers must have this insurance for no less than $2 million for any claims), Australian Credit Licence (by law, brokers providing credit services to consumers are required to apply for this licence to continue to provide credit services) and a finance brokering contract (which will reveal fees consumers may have to pay their broker, the broker's range of lenders and the financial incentives brokers receive from their lenders for facilitating the sale).Mr Lee says consumers ought to consult at least two mortgage brokers but as many as possible is ideal."Then rank them based on timeliness of response and how well they fit to your service expectation and lender range," he says.
© 2011 The Age
