What to Expect Before Meeting Your Mortgage Broker
1st August 2024
With many lenders to choose from, a mortgage broker can help you find a home loan that meets your needs and offers value for money. Here’s a guide on how to prepare before meeting your mortgage broker.
A mortgage broker acts as a go-between with banks or other lenders to arrange a home loan. They must act in your best interests when suggesting a loan for you. A good broker will:
- Understand your needs and goals.
- Determine what you can afford to borrow.
- Find loan options that suit your situation.
- Explain how each loan works and what it costs (e.g., interest rate, features, and fees).
- Apply for the loan and manage the process through to settlement.
Typically, lenders pay the broker a fee or commission for selling their products, so you usually don’t pay the broker directly. Occasionally, a broker might charge you a fee directly. It’s important to understand how your broker is compensated to ensure you’re getting a good deal.
Before meeting with a mortgage broker, ensure the broker is licensed to give credit advice by searching ASIC Connect’s Professional Registers and consider your non-negotiable features, for example, the lowest cost loan vs. the ability to re-draw.
Documents to Bring
For the initial meeting, bring proof of identity (e.g., passport, driver’s license). If you decide to proceed, you’ll need additional documents such as:
- Recent bank statements
- Proof of deposit (e.g., savings or equity)
- Proof of income (e.g., payslips, tax returns for self-employed individuals)
- Statements for any existing liabilities (e.g., credit cards, other loans)
Questions to Ask Your Broker
Prepare a list of questions to ensure you understand the loan options available:
- Do you offer loans from a range of different lenders? What sort of lenders do you work with? What kind of lenders can’t you access?
- How do you get paid for the advice you’re giving me?
- Why did you recommend this loan to me?
- What fees will I have to pay when taking out this loan?
- What features come with this loan?
- How do the fees and features of this loan affect how much the loan will cost me?
- Can you show me a variety of options, including one with the lowest cost?
Meeting with a mortgage broker is a significant step towards achieving your property goals. Arriving prepared and understanding the process ensures you get the most out of your experience, leading you to find a mortgage that best suits your needs. Being well-prepared with the right documents and questions will help make the process smoother and more efficient.