Finance Broker Home Loan Refinance
According to the Mortgage and Finance Association of Australia, the MFAA, finance brokers are now the number one choice for consumers who are seeking a home loan or to refinance their existing home loan. Businesses too use finance brokers to help them with their finance needs from car and equipment leasing to loans to help their businesses expand or commercial property finance to purchase business property.
The services of a finance broker are usually always free in Australia for home loan customers seeking to refinance a home loan or searching for a new home loan to purchase residential property.
If a finance broker is asking for a fee for helping you find and organise a home loan it may be advisable to shop around a little first to compare what other finance brokers are offering.
Finance brokers work with customers to determine their borrowing needs and ability, select a loan suited to their circumstances and manage the home loan application process through to settlement.
Some of the benefits of using a Finance Broker include;
- Finance brokers do all the legwork for you
- Finance brokers should cost you no more than applying with a lender on your own
- Access to a wider range of home loans
- Experts in a wide range of home loans and other finance
- Much more flexible than most banks or other lenders
- Greater expertise as finance brokers focus on home loans and other finance only
Panel of Lenders
Brokers can only offer loans from the lenders they are accredited with. They call this their panel of lenders. Lenders will normally range from the large banks through to specialist non-bank lenders and mortgage managers. The size of a panel of lenders will vary from broker to broker. You can ask to view your brokers panel.
How Finance Brokers are Paid
Residential finance brokers are remunerated by the lender and receive either an upfront commission and a trailing commission or possible only an upfront or trail commission only on the home loans they settle. It is not standard industry practice for a residential home loan finance broker to charge a customer for their service due to this arrangement.
The normal practice for commercial, equipment and general finance brokers is that they enter into a mandate or agreement with the commercial or business borrower which provides for a fee to be paid by the borrower to the finance broker for sourcing their required finance.
Why Use an MFAA Member
MFAA members must adhere to the industry Code of Practice which required high professional standards, fair business practices, ethical behaviour and compliance with both the letter and the spirit of the relevant laws and regulations – all in the interest of you, the borrower.
MFAA sets the highest standards in the industry for its members:
- Industry experience
- Education standards
- Ongoing education to maintain accreditation
- Probity checks
- Professional indemnity insurance
- Membership of an external dispute resolution service
Legal Requirements for Brokers
There is currently no national regulation for finance brokers. However, some state laws and regulations exist, such as:
- Brokers are required to hold a licence in Western Australia
- Brokers are required to be registered in the ACT
- A finance broking contract (FBC) has to be signed in NSW and Victoria between the broker and the borrower before the broker can approach the lender on your behalf. The FBC ensures brokers fully disclose all details of the loan transaction, including any monetary or non-monetary benefits they receive. The MFAA asks its members to adopt this process in all States.
More information about finance brokers for consumers and business is available at the essentials of borrowing website.
So if you are looking to refinance a home loan or take out a new home loan the services of a finance broker could save you time, money and help you compare and choose from a much wider range of home loan options than may be possible trying to apply for a home loan refinance on your own. The best part is that using a finance broker to refinance your home loan should cost you no more than applying for the home loan without a finance broker.
