Choosing a mortgage broker (lender) checklist

Hi,

Being currently in search for a trusted mortgage broker I conducted a small research and would like to share a comprehensive checklist 'questions to ask your mortgage broker' with all concerned.

There are two intentions behind it:
1. I believe this checklist could be handy to all first starters (as it consolidates the info from at least five various sources)
2. Would be perfect if experienced forum-residents have a look at it and comment on anything missing or misleading?

Would love to hear your feedback.

Cheers,
Svamin
 

Attachments

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Your checklist looks like an exam for the mortgage broker diploma!

Why don't you call some brokers up and talk to them directly? Each situation is different so not all questions you have listed are applicable but most of your questions can easily be fleshed out in a quick conversation.
 
How about hanging around the forums for a while and reading their responses to questions and queries? This will help you get an idea if they know what they are talking about. That and personal recommendations from other investors is how I would choose a broker.

Regards,

Jason
 
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If you had enough knowledge to understand all of a good broker's answers to those questions, you would be able to assess a broker without the list.

I think it's a good list. I just think this is the list of stuff YOU need to understand to assess a broker.
 
The content is great and something you would get from a broker AFTER your gut feel is satisfied.

It certainly contains a lot of things that the borrower should know, but no broker can complete this without an in depth interview with the borrower first.

Arrogant I know, but if this landed in my email, I would first interview the client via phone and ask them to do a fact find, and then reply in specific way to the questions posed, because frankly some of them delve into Intellectual property, while some are superfluous

Again, probably just me, I have found the more detailed the potential questioning around "irrelevant" things tends to annoy experienced brokers who are "busy" and you have an increased chance of someone that will provide the essay, and presents well on paper, but writes 2 loans a month..........


Id say trim it to exclude the "how long is a piece of string questions" and you will have a much better uptake.

ta
rolf
 
The content is great and something you would get from a broker AFTER your gut feel is satisfied.

It certainly contains a lot of things that the borrower should know, but no broker can complete this without an in depth interview with the borrower first.

Arrogant I know, but if this landed in my email, I would first interview the client via phone and ask them to do a fact find, and then reply in specific way to the questions posed, because frankly some of them delve into Intellectual property, while some are superfluous

Again, probably just me, I have found the more detailed the potential questioning around "irrelevant" things tends to annoy experienced brokers who are "busy" and you have an increased chance of someone that will provide the essay, and presents well on paper, but writes 2 loans a month..........


Id say trim it to exclude the "how long is a piece of string questions" and you will have a much better uptake.

ta
rolf

I dont think its arrogant at all. If i received this, in my inbox it would be deleted as quick as it was received or I would pass on the number of the closest branch. Like you said, for those that write a couple of loans a month ok, but not for those that are busy.

If this is what you can expect pre interview, can you imagine what the ongoing maintenance would be like. Sorry, not for me ......
 
Yes agreed, sorry Svamin but would you ask a solicitor or a mechanic for exmaple to jump through these hoops?

I doubt it and if you did they would probably choose to not do business with you. I suggest you trim down the list a fair bit and focus on what's important. Trust. Expertise. Experience.
 
I think many of us older Brokers on the forum would be sending you our own questionairre back asking you to complete it first telling us abit about yourself and your requirements.

That whittles down the wheat from the chaf because believe or not some members contact more than one of the Brokers on the forum.

Then we have those who send is an email entitled "Hi ........." with a list of 20 questions. They dont even personally address it to the sender.

As Marty mentioned imagine going and ask an Accountant 20 questions and he send you his bill for his time yet we are expected to hand over the inner secrets for nothing.
 
Thank you all for all your opinions! That's indicates to me almost everything (if may be even too much) has been covered. I came with an extra question to add to it though: how quickly the lender will allow to refinance?'

I probably confused you as I had no intention to send this to pre-assess the broker rather than having a comprehensive list of topics to cover during our cooperation. Some answers should be definitely collected in informal chat, some during personal meeting, some after I share information, some only in almost the end. And I agree with Rolf Latham, all the answers could only be covered after the broker's services are executed.

The only thing I hope is that Rolf Latham does not mean questions regarding methodology and commission structure are considered IP... My opinion is the broker's true value added is relationships with lenders and ability to understand the Client, rather than hard stuff (methodology). Will be glad to get objections from the professionals here.

I agree with Aaron_C and jrc77 in terms of personal recommendations and forum to check, but sometimes a good broker might not have a public profile, or some questions still might not be addressed.

Being in consulting business for some time, I learned that trust is the most important asset which is worth investing in and which will insure low maintenance in future.

The right decision making should be based on hard facts (data gathered through utilizing the checklists like this) and soft opinions (referrals, personal recommendations, etc.). Obviously, a knowledgeable buyer might not be the right client for some brokers preferring more Laissez-faire consumption (take-or-leave)...

What I am glad to read in this forum, is that at least three finance practitioners would respond even after getting such checklist (which I would never send) to go further and start collect information about the prospective client.

Thank you all again!
 
The only thing I hope is that Rolf Latham does not mean questions regarding methodology and commission structure are considered IP...

Commission is open disclosure, always has been.

Methodology and resulting Credit Advice is in my view IP.

And thats why many experienced brokers are cagey to work with some folks.

Believe it or not, some folks will take the work done by the broker (sometimes 30 mins, sometimes several hours to a couple of days of scenario and planning analysis) and then "shop" that work and credit advice for

1. A better rate or fees. often without respect for product or structure
2. Use a special pricing for a "3rd"quote so an existing relationship can be price matched ( ie NAB is famous for sending clients out to waste other peoples time)
3. Using a commission rebate broker or referrer,who MAY not be able to offer the same in depth level of planning or advice.
4. Simply wanting to do the work themselves for whatever ( often logical) reason.
5. Get multiple brokers to do the "same" work, thus resulting in different lines of advice, to see what may be a better structure. While this seems logical, when seeking medical advice we tend not to GP shop ?

This doesnt happen to an experienced broker much ( if at all), because they do the ground work on the client before they provide any specific advice.That ground work will quickly show if the client can benefit from value added advice or is best served with an on-line lender.

Sometimes its just that the client and the broker dont have sufficient trust, and so the client needs to have the work done by someone they feel confident with, im ok with that.

ta

rolf
 
The right decision making should be based on hard facts (data gathered through utilizing the checklists like this) and soft opinions (referrals, personal recommendations, etc.).

For you, yes, thats how you process data and that is 100 % fine

Then there are those that are 100 % trust based on their emotions and they pay "zero" attention to the facts figures, fluffy brochures and fancy websites.

In between are the other folks who use a mix of hard data, fluffy logic, and gut feel.

After a little while in this style of service business you can learn to work to all those needs, so no one is left out.

ta

rolf
 
Methodology and resulting Credit Advice is in my view IP...

I see no contradictions. The way many consultants work is not a Rocket Science (more a common sense) and could always provide sufficiently enough information about the approach to be used: to convince the Client how you add value. Driving from my experience if a Client wants to execute a detailed approach presented to him by himself - my pleasure... as I know he will likely come to ask for support. It is not about the idea but the execution where I deliver the value. And that's is where you correctly pointed, you will protect you unique way of doing the service and expect to be paid for the advice.

Believe it or not, some folks will take the work done by the broker (sometimes 30 mins, sometimes several hours to a couple of days of scenario and planning analysis) and then "shop" that work and credit advice for ...

Agree. That's inevitable risks in any consulting occupation, which will always result in some churn rate and are usually managed by building trust and delivering superior service to the worthwhile clients.
 
People may be interested to know, that many of the seminars I've attended have a sales component, which often discusses how to read body language and personality types, then how to interact with those personality types to result in a sale.

Whilst brokers don't actively seek out this type of training, through the numerous training sessions we attend, I can guarantee you that every broker that's even remotely successful has had a substantial amount of training in dealing with people who are highly analytical, through to those who make decisions based on emotion and feelings, and all the different personalities in between.

Sorry if this offends anybody, but brokers are in the business of making sales, and dealing appropropriately with different types of people is a part of that. In most situations I could comfortably answer every question on that list, although I suspect a lot of borrowers don't actually understand some of the questions.

As an example of this, who knows what the right answer is to, "Do you have your own credit license or are you a credit representitive?"

Personally I believe that the answer is completely irrelevant as an indicator to the quality of service a broker provides. it's actually about how they have decided to structure their business; kind of like asking if they use a Pty Ltd company or a discressionary trust structure for their business.
 
Fact is, good brokers generally don't lack for work. You can approach them however way you want and decide that you'll only work with someone only if you are provided with this and that, but then you run the risk of the broker simple deciding you're not worth the trouble.

Sure, they might be making money from you, but you also want good ideas and service from them. You don't always get to dictate the terms.

Similarly, there are people who say 'the selling agent/solicitor/PM should have provided me with this or what, and doing so and so isn't asking too much, in my opinion' etc etc. Sure, you might expect it, but that doesn't mean they'll provide it, possibly because they can make money from less demanding clients.

It's probably a lot easier to understand how it really works, knowing enough about the products themselves that you can assess the broker's skill on what they ask and their advice.

Put it this way, if I speak to a broker and their advice is to cross col everything with one bank to get an extra discount, and use XYZ bank because they have the lowest rate, I'm running away. I don't care what they methodology is.
 
Put it this way, if I speak to a broker and their advice is to cross col everything with one bank to get an extra discount, and use XYZ bank because they have the lowest rate, I'm running away. I don't care what they methodology is.

agreed i attempted to go local but after i went in there looking for the correct structure and basically left there wondering how much i had taught them i decided to get some experienced help
they were sentences like these
who would you like to go with, we have a choice of these lenders...., we can cross these loans..., this one has the best interest rate....


basically any broker on this forum should know what there doing, the banks pay them not you, theres no real reason not to go with one of the experienced brokers on this forum
and with all the extra advice you get its a win win
 
agreed i attempted to go local but after i went in there looking for the correct structure and basically left there wondering how much i had taught them i decided to get some experienced help
they were sentences like these

basically any broker on this forum should know what there doing, the banks pay them not you, theres no real reason not to go with one of the experienced brokers on this forum
and with all the extra advice you get its a win win

You've probably misunderstood me, since I don't understand what you're saying.

I'm not saying there's anything necessarily wrong with a broker near you. There might be a great one right around the corner from you, for all I know. My point is that instead of asking exhaustive questions to feel comfortable about them (especially questions that only 'seem' appropriate to you), you should instead learn enough of how it works yourself, so that you can assess brokers based on their suggestions.

If you don't have knowledge, you can't tell whether a broker is good or not. You say 'experienced brokers should know what they're doing'. Yes, they should. But how do you know that they're experienced, or that they know what they're doing? My suggestion is to to know enough to be able to tell the difference.
 
In relation to the OP's list, having enough knowledge would take care of most of the questions, so that you don't have to waste a good broker's time with it. That way, a good broker can instead focus on figuring out solutions for you.

Here are the things that I wouldn't ask a broker:

methodology, length of experience, professional indemnity insurance, membership of whatever, what their credit license is, reference checks (I don't care as long as the broker comes out with a plan I like),

how much deposit I need, impact of credit cards, what information I need to provide, how to avoid x-col, LOC v offset, what is LMI, procedures for loan settlement, APR (the borrower should already know this). Most of this can be learned with a little research, the rest depends on the loan product, and the borrower should already have an idea of what they want.

What information and in what form will you provide (the borrower should already know what information they need to make a decision - form is a weird question. What, email? A spreadsheet? Bright colours?

Processing or just review (shows lack of knowledge about what the broker does, of course they process)

Loan features (yes, the features are relevant, but relevant only after the broker has done an assessment of your needs. You should know enough about your own needs to know what you need, and what you do not.) Some features are contradictory and should be clarified as part of your requirements. e.g. weekly / fortnightly / monthly payments is irrelevant if you go IO.

A much more useful dialogue would be:

Here is my situation. Here is what I want. Here is what I see happening in the future, based on these assumptions. What plan do you suggest?

You don't have to be right, and a good broker will question your assumptions, then they can give you a plan.

As I said before, it's a good list. Of what you should research BEFORE you talk to a broker.
 
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