Your first meeting with a mortgage broker: What to expect

author-avatar By on January 31, 2020
Your first meeting with a mortgage broker: What to expect

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If you want to get the most out of a mortgage broker, simply knowing the process should stand you in good stead. Marc Barlow of Mortgage Broker Melbourne reveals the key ins and outs of a typical mortgage broker meeting.

Visiting a mortgage broker should be a time of excitement. For many people it signals taking their first step into the Australian property market. For others it could mean refinancing an existing loan and receiving a deal that’s more suited to their current circumstances or adding to their existing property portfolio.

No matter what your circumstances are, it helps to be prepared for your first meeting with a mortgage broker. The more information you share, the easier it is for your mortgage broker to help you make the right loan decision.

This article will go through what to expect before, during and after your first meeting with a mortgage broker. We’ll also touch on the specific documents that you’ll need to provide for your broker to enable them to find competitive/appropriate loan options for your circumstances.

It is worth noting that all mortgage brokers are not the same. At Mortgage Broker Melbourne we try to provide our clients with all of the necessary information without overwhelming them with unnecessary technical details. Your broker may be different, but this article should help you get the most out of your experience.

Before the meeting

Responsible Lending Questionnaire

Before your first meeting with your mortgage broker they will often ask you to complete a responsible lending questionnaire. The questionnaire is to help your broker get to know you, your circumstances, and help them start putting together a plan for you.

Credit Guide

Transparency is incredibly important when dealing with a mortgage broker. Your broker should provide you with a credit guide that outlines:

  • The exact role that a mortgage broker plays in securing your mortgage
  • The sort of information that a mortgage broker will ask of you in order to complete a credit assessment
  • Your rights in obtaining a credit assessment
  • Which lenders the broker deals with and how regularly they deal with them (look for a broker that works with a number of lenders – known as a diverse lenders panel)
  • Fees and charges – a mortgage broker typically won’t charge you directly. Instead, they’ll receive a commission from the lender you choose from their panel.
  • What to do if you have a complaint about your broker, including how to escalate that complaint to the Australian Financial Complaints Authority (AFCA).

Privacy Statement

This is similar to a regular privacy statement that any business might provide you with. Generally, it’ll outline the ways that your information is both collected and used. It will usually include:

  • How information is collected from you
  • How information about you is collected from other sources
  • How your information may be used
  • What happens if you don’t provide enough information
  • Sharing your information

Privacy Consent Document

This is a standard consent document asking you to allow your mortgage broker to collect the information outlined in the privacy statement. You’ll be asked to sign this document so your broker can move forward with the quote. At this stage you can also let your broker know if you don’t want them to obtain a credit check – i.e. you will obtain your own credit check or you are happy for the credit provider to obtain one on your behalf.

Questions you can ask about your loan

During the meeting it is common that your broker will try to understand your personal circumstances. This helps them tailor a loan that’s suited to you. However, it is important that you come prepared with a number of questions of your own. These may include:

  • What is the comparison rate? This helps you work out the true cost of a loan. It reduces the loan to a single percentage figure that includes any additional fees.
  • Will there be any unforeseen costs on this loan? Examples include: government fees, valuation charges, or event-based fees such as early repayment.
  • Is the loan transferable if I move? This is called loan portability and it saves you the hassle of refinancing.
  • Can I pay fortnightly or weekly? Making regular repayments when you can enables you to potentially save thousands in interest every year.
  • Are there any penalties for extra repayments? Penalties for extra repayments can add up quickly and even cancel out the interest you would have saved by paying off your mortgage early.
  • Does the loan have an offset account? An offset account is a transaction account that is linked to your mortgage. It’s often used by couples/individuals that have large balances sitting in a transaction/savings account. You can use that balance to ‘offset’ the interest on your mortgage.
  • What are the pros and cons of fixing my interest rate? Typically, a fixed rate home loan offers more stability, where as a variable rate home loan offers more favourable features.

Meeting with your mortgage broker

Where to meet

Meeting with your broker should be straight forward. Many mortgage brokers have offices conveniently located in the central business district of their city. Because brokers’ offices are usually in the city center it’s best to travel by public transport as parking in the city can be expensive.

Many mortgage brokers also take their services mobile. If you’re unable to make it into the city ask your mortgage broker if they’re able to visit you in your home.

Documents to bring to your first meeting with a mortgage broker

At this early stage, the only documentation your mortgage broker will need are related to proof of identity (think passport, driving license, etc.)

If you then decide you’d like to choose the mortgage broker to arrange a loan for you, they will supply you with a short list of paperwork to support your application to the lender. These documents often include the following list but other items may be required, depending on your individual circumstances:

  • Recent transactions and bank account statements
  • Proof of deposit in the forms of saving (if you’re relocating you’ll provide proof of equity by way of current home loan statements and a value estimate for the property to be sold)
  • Proof of income with payslips or tax returns if you are self-employed
  • Statements for any liabilities like credit cards or other loans

After your first meeting

If you decide to go ahead with your current broker, they’ll begin the process of organising a loan on your behalf. This usually requires you to fill out a questionnaire outlining your employment history, a more detailed analysis of your assets (including your superannuation), and the value of the contents of your home.

After your broker has all of your information they’ll type it up into a client’s needs analysis, which they’ll send to you for review. This analysis should encapsulate your financial situation and the purpose behind your loan. When you’ve returned this document to them, they’ll follow up with a list of loans for you to compare. This list should include repayments and interest rates laid out in an easy-to-digest format.

As well as a comparison of different loans, your broker should send a disclosure document that sets out the precise commission payable to the broker and all of the fees payable by you. Not all brokers charge a fee, but some brokers do and they will be outlined here.

Once you’ve found a loan option that’s fight for you, the final step is for you to sign a lender privacy form. After this is signed your broker can submit your document. After submission, your broker should touch base with you regularly to inform you of the application’s progress.

Summary

Meeting with a mortgage broker is a step towards meeting your financial goals. Arrive prepared to make the most out of your experience and you’ll be on your way to finding a mortgage that works for you. Complete your broker’s responsible lending questionnaire to hit the ground running and make sure to understand how your broker is remunerated by the lender and the ways that they’ll obtain and use your personal information.


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author-avatar
Marc Barlow is the principal at Mortgage Broker Melbourne and has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!

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