Frequently Asked Questions
Brokers work with clients to determine their borrowing needs and ability, select a loan suited to their circumstances and manage the process through to settlement. Some benefits of using a broker: They do all the legwork for you, Access to a wider range of loans, Experts in a wide range of loans, More flexible, Greater expertise as they focus on loans only
Usually there is no cost as the bank gives a fee to the broker for introducing the client and completing the paperwork/ processing. Rarely a nominal initial fee for new clients which is often refunded if the loan proceeds. Where the loan is complex with Trusts, specific requirements or many purchasers, the broker may charge a fee but this will be disclosed via a written quote very early in your conversations.
The mortgage broker is accountable to you as a potential long term customer.
The broker has a large range of lending products, rates and options to choose from.
The broker has access to a wide range of policies so is better equipped to find the specific solutions you may require.
The broker introduces you to the final bank/ lender, but all of your contracts, agreements, money and responsibilities are with the bank.
The broker offers exactly the same products as the banks as they are an introducer, not an originator.
Brokers try to work 9am – 5pm typically, but often add the extra service of after hours contact and home visits for your convenience.
Consistent contact. In 2 years time if you want to change a loan, the broker will be there whereas the bank staff member has probably moved in.
The bank provides the funds for the home loan, the banking platform, often branch support and they are the legal entity that you deal with
The bank offers their product and features only, and they will be the ones to assess if you meet their specific credit guidelines.
Your loan contract is with them and ultimately you are responsible for paying them
They usually have their own in branch ‘lending manager’ explaining the products and supplies the paperwork, then the file goes to other departments for finalisation
They can only offer their own services, whether good or bad
Lending staff operate from 9am – 5pm with some exceptions.
You have a narrow range of products to chose from and you must fit into their specific bank borrowing policy.
The staff work for the bank and are accountable to the bank to meet sales targets and ideals of service.
Yes. The minimum qualification before a broker can practice is a Certificate IV in Finance and Mortgage broking. Police checks are also mandatory as is membership of an External Dispute Resolution Scheme like www.COSL.com.au , completion of the Anti-Money Laundering and Counter-Terrorism Financing compliance training and membership of industry associations www.mfaa.com.au or www.fbaa.com.au .
Bank lenders have to do the same minimum Cert IV certification; however they can start working as a lender, whilst they are learning.
Whilst Cert IV is a great start, like most courses, the real learning starts on the job and it takes 2-3 years minimum for someone to start to be effective and even 15 year veterans say they learn something new, regularly.
The next level up is a Diploma in Finance and Mortgage Broking . The best brokers normally have relevant life skills like experience in other finance products, experience running business, statistical analysis, Financial planners, accountants or compliance related roles.
A ‘bank’ is the institution that takes deposits and is also the lender.
A ‘lender only’ is someone that offers funds for borrowing that are usually sourced from super funds, wholesale banks, private funds, other banks etc. For the sake of easy reading, I will just use the more generic term ‘banks’ here.
Traditionally banks held all the information, skills and your local bank manager was known to you by first name and offered a great value-add to your personal and business affairs. You had one bank for life and you were at the bank weekly to deposit cheques, transfer money or make transfers. As corporate structures grew, branches declined and computer automation took effect, banks have become faster and more efficient with increased services like online banking and ATM’s, however with today’s volumes, clients have become a number and the personal understanding lost for the sake of volume and low cost transactions.
In the 1990’s, mortgage brokers started emerging in numbers to help bring back the competition and personal contact. Today there are over 15,000 qualified and licensed brokers in Australia, working side-by-side with almost all lenders, to offer the skill, knowledge, service and availability that people prefer. Almost 50% of all home loans go through a broker. The brokers have bought more transparency of information, created tools to compare many lenders fast and through the remuneration agreements, banks save a lot of money they would normally have to spend on their own staff and a professional broker can build a base of regular clients, much like an accountant or solicitor does.
At Funding Financial Freedom we offer finance solutions for a range of items including Motor Vehicle and Asetts finance, From Samll Aircraft to photocopiers, get it touch to explore your options, just like a home and investment loan we look at a large panel of lenders to get the right Fit