Whether you’re taking out a loan for a big purchase or applying for a mortgage, weighing up who has the best offer can be tough. And, once you’re locked in with a bank, it often seems like a hassle to switch. But while the financial institution you’ve gone with might have hooked you in with a great rate, you can be pretty sure that they won’t go to any lengths to continue to deliver the best deal. Gone are the days of bank loyalty.
That’s where a broker comes in – giving a personalised service where you can weigh up options and discover the best solution for your financial situation. In this article, we want to provide you with an insight into how a broker could potentially save you thousands and how to ensure you’re getting the most out of the partnership.
Is working with a broker right for you?
You may be looking to take out a loan or already have one. Either way, a broker can help secure the best rates from the outset or guide you on the best provider to switch to. They’ll offer different options and recommend a choice based on your financial and savings goals. Unlike taking an educated guess, your broker will be able to suggest the best bank or lender with prior knowledge and understanding.
How to choose a great broker.
Your first port of call would be to check they have an ABN and Australian Credit Licence. You can check with ASIC and/or the Mortgage and Finance Association with Australia. All brokers legally have to have an ABN and ACL. You can also seek recommendations from people you trust or a financial institution.
Once you’ve checked they’re licenced, get in touch with them for a call. Feeling comfortable with your broker is essential as you’ll be chatting over some serious topics. If you can’t be open and honest with them, there’s little point in working with them.
You can ask them about their lender’s panel and any lenders they cannot access. This will give you a clear picture of whether they’ll be practising with significant bias or not.
Finally, when you’re happy with them, ask them if there’s anything you need to prepare for your first meeting.
Questions to ask in your meeting
Going into your meeting, you want to be prepared with any details your broker has asked you to bring and your own questions too. Going in armed with set questions ensures that you’re getting a customised service. Once your broker has discussed your needs and overseen the materials bought with you, these questions should be asked:
- Which type of loan is best? Here you’d be looking for an explanation of the different types of loans that may be available to you.
- Why did you recommend this loan to me? This is an opportunity for the broker to highlight their understanding of your situation and explain why their recommended loan is the best choice.
- What is the interest rate on this loan? Ideally, they’d explain the interest rate on the specific loan and how interest rates work overtime.
- Are there any other fees associated with the loan? Your broker may talk in jargon to hide fees but ask as many questions around this as possible.
- What features come with the loan? Also, ask how they work best for you.
- How long will it take for my loan to be approved? You can ask them to explain the different stages.
- Can you show me some other options? You’ll be given a minimum of 3 options to discuss with your broker, so you can compare features and benefits and find the right loan option for you.
Ultimately, you hold the cards in the broker-client relationship, so be sure to ask as many questions as you need to feel confident about your choice. You can also walk away from your meeting to think about it – never feel pressured to decide on the spot. We hope this blog has given you more confidence in working with a broker and allows you to find a loan that could save you thousands. For more mortgage advice, check out our blog. Or, for mortgage advice from a professional, get in touch.