You will be giving your mortgage broker your personal financial details, and your mortgage broker will be helping and advising you as you buy your home – a very large purchase. Therefore choosing a mortgage broker should be done carefully. Not sure what a mortgage broker does – check out our mortgage brokers guide.
There is currently no requirement in NZ for a mortgage broker to belong to any group or to have any financial qualifications – there is also no requirement for a mortgage broker to tell you about their background, experience, and/or qualifications - it is up to you to find out. But a good mortgage broker will be open about their qualifications and memberships - so ask!
Preferably you want your mortgage broker to have a relevant banking or finance background. This background can be in the form of work experience prior to becoming a mortgage broker or from education. You mortgage broker should at least a few years experience in the job of mortgage broker (and evidence of up to date and ongoing training is a plus).
Some mortgage brokers are members of the Professional Advisors Association (PAA). This body has a code of ethics and rules that members must adhere to and all members must have indemnity insurance. The PAA also encourages their members to keep up to date with training available. If the mortgage broker you choose is a member of the PAA – this is great!
Ask the mortgage broker how many lenders they deal with, just a few is not good enough – in excess of 20 is great! Always check if there is a fee! You should be able to find a mortgage broker who will do the work at no charge to you.
Ask the mortgage broker what they can do for you. They should be offering to:
- Assist you in finding the lender that most suits your needs
- Save you time by speaking to a number of lenders on your behalf
- Advise you on suitable loan structures – taking into account your personal situation.
In addition a mortgage broker may offer additional services like:
- Providing you with financial advice
- Liaising with you lawyer, property valuer, building inspector, real estate agent etc – effectively providing a ‘project management’ service.
Which of these additional services you choose to use from your mortgage broker will depend on what you want from your mortgage broker, and how qualified you think they are to provide these services i.e. financial advice really should come from a dedicated financial adviser.
Finally, go with your instincts. There are plenty of mortgage brokers out there, and because they are dealing with your personal information, and personal situation, you need to feel comfortable about that. You need to be confident that your mortgage broker is intent on getting the right mortgage for you. If a mortgage broker doesn’t feel right, find another.