Tips for getting the best deal from mortgage brokers

  • Sign a contract up front with the mortgage broker that fully outlines both parties’ expectations and obligations.
  • If you have a verbal agreement with a broker, get it in writing.
  • Ask the mortgage broker how much the service will cost you and when you have to pay
  • Make sure your contract with the broker stipulates that they only get paid if they get a loan that suits all your requirements.
  • Don’t pay an upfront fee. Do not pay any fee until the lender has approved the loan, otherwise you may not retrieve your money.
  • Ask if the broker belongs to an industry association such as the MIIA and if that association has a dispute resolution policy.
  • Discuss their methodology upfront. How do they identify the best solution? Is it commission-based or do they use a software package?
  • How many loans do they evaluate through that package and how many lenders (and which lenders) do they represent?
  • Shop around. Call a range of finance brokers and ask about their charges and their offerings. Ask friends for recommendations.
  • Do not sign anything without reading it carefully and take the contract home to read it. Do not be pressured into signing.
  • If you do not understand something in the contract, get independent advice.
  • Ensure your broker is not just a lender in disguise, offering only one company’s loans,
  • Ask how the broker gets paid. Ask them to disclose all commissions, payments and kickbacks they receive.
  • Ask them to provide a formal comparison of any loans recommended, including upfront and ongoing fees.
  • Ask them to clarify the actual cost of the loan, including and excluding interest, fees and ongoing costs.
  • Double check. You can cross check your broker’s final recommendation by accessing the online calculators.
  • Ask if they comply with the Privacy Act. You want to protect your financial and personal details.
  • Ask if they have professional indemnity insurance.