You are entitled to know how your broker gets paid for the deal. The MFAA Code of Conduct requires all member brokers to disclose on request the amount of commission they receive for a deal. This is important as some brokers prefer only those lending institutes that offer a high commission for the business. Such brokers will not have your best interest in mind.
They will influence you to take a mortgage whose terms may not be beneficial to you. Also note that brokers are not supposed to charge you any fee for brokering the deal. Rather, they are paid by the lending firm to which they give your business. If your mortgage agents does charge service fee, s/he should provide a valid reason or some additional service for doing so.
Before hiring, always ask a mortgage broker if s/he has an accreditation from MFAA (Mortgage and Finance Association of Australia) for mortgage consultancy. An MFAA accreditation means that the broker has undergone training and work experience as part of membership criteria.
It also means that the broker abides by a rigorous and high standard of professional ethics in order to retain membership. In case you are sceptical with the answer, always cross-check at the MFAA website by clicking on the Find an MFAA Member option. Moreover, you are entitled to ask for and check all papers on professional qualification, experience and clients’ reference.
Always enquire about the categories of lenders offered by the broker. A broker who offers a healthy mix of lending institutes is more suitable than somebody who has only one lending institute on the panel. Ideally, a good broker should offer you the flexibility of choosing between mortgage managers, national banks, foreign banks and other non-traditional lending institutes.
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