Five questions you must ask your mortgage broker

There are always many things that are crucial for a prospective property buyer to ask a mortgage broker, particularly when choosing who is going to help them to get the best loan.

If you haven’t already read our guide to choosing a mortgage broker, then that is the best place to start.  

Here are five important questions to ask your likely mortgage broker candidate:

1. How do you get paid?
   
   The majority of mortgage brokers work on a commission basis, however there has been an increase in ‘fee for service’ in this industry. It’s important to understand that, while brokers are there to act in your best interest, the rate of commission paid by a lender has caused waves over the past two years.
   
   A professional and ethical mortgage broker will act in your best interest, regardless of what extra commissions are on offer. Don’t be afraid to ask about any conflicts of interest to see what they say.
   
   
2. Who is on your lending panel?
   
   Not every mortgage broker has access to all lenders and banks. The Mortgage and Finance Association of Australia explains that each broker has to obtain accreditation with the lender is order to sell their products. This is called their ‘panel of lenders’. It is representative of how many products they have to select from and, therefore, your chance of getting the best product.
   
   The reasons for allowing a broker to have access to a lender’s products are varied, however you don’t want to start out with someone who cannot offer you a range of options.
   
   
3. What is your average client like?
   
   Are they specialists in a specific area, and do you need them to be?
   
   If you’re an unusual case, such as a multi-property investor who is self-employed and looking to purchase a difficult block, then your needs are going to be different to an upsizer who has saved up a hefty amount to get into their next property.
   
   Similarly, first home buyers may want someone familiar with first timers and knows to explain different terms in layman's language. Remember that most experienced mortgage brokers should be able to apply their skills to a range of situations - so ask them specifics about how they might deal with your loan, and any issues they foresee arising.
   
   
4. What are your licence details?
   
   Ensure legality, always. This will help protect you to some extent.
   
   The broker should have an Australian Credit License and they should display this number on official paperwork, or when asked. Check this through ASIC, and look for any misdemeanours.
   
   To get a credit license they need to have a criminal check. You will also want to check for professional indemnity insurance.
   
   
5. Can you describe to me how you’ve managed to get a difficult deal across the line?
   
   Hearing their experiences first hand, and asking specific questions, can be a great help for any property buyer.
   
   If you approach difficulty in achieving a loan, then you want to know you’re in safe hands. This will also help flag how experienced they are, as well as if they are engaging in anything untoward.