Top 20 Questions To Ask Your Mortgage Broker
The right mortgage broker can save you time, money and stress. But the wrong one? That could mean hidden fees, a loan that doesn’t fit your financial goals, or frustrating delays.
The good news is that asking the right questions can help you make sure you get the right broker. That’s why we’ve put together 20 must-ask questions that cover everything from finding the right mortgage broker to choosing the home loan that suits you. These questions will give you confidence and clarity that you’re making the best choice for your future.
Why Do You Need A Mortgage Broker?
The right mortgage broker can get you better deals and exclusive offers – even get your loan approved faster. In fact, the Mortgage & Finance Association of Australia (MFAA) found that 74.6% of all new home loans in the September 2024 quarter were written by mortgage brokers. That means most Australians trust brokers to guide them through the complex home loan process.
Top 20 Questions To Ask Your Mortgage Broker
About The Broker’s Expertise And Services
1. Are You A Member Of Any Professional Associations?
Memberships with associations such as the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA) indicate that a broker has certain expertise and skills.
2. How Long Have You Been Operating As A Mortgage Broker?
You definitely want someone with ample experience as your mortgage broker, especially if your situation is complex.
Since you’ll be relying on your broker to help you make financial decisions, it’s important to choose someone with expertise in the kind of finance you want and a proven track record.
3. How Many Lenders Are On Your Panel?
The more lenders a mortgage broker has on their panel, the more options they have for you.
Don’t hesitate to ask which lenders can help you if your case is special. You can even ask why they recommended a particular lender.
At Home Loan Experts, we have over 50 lenders on our panel; each one has their own specialties.
4. What Types Of Lenders Do You Have On Your Panel?
A good broker should work with a mix of banks, non-bank lenders, and credit unions. Banks often have stricter lending criteria, while non-bank lenders and credit unions may offer more flexible options, especially for unique financial situations. If a broker has limited lender options, you might miss out on better loan choices. Asking about their lender types helps you understand your options.
5. Do You Charge Any Brokerage Fees?
Most mortgage brokers do not charge customers directly, as they are typically paid by lenders once the loan is settled. However, some brokers may charge additional fees in certain situations, such as:
- Upfront fees: Some brokers charge an upfront or engagement fee for their time and effort, particularly if the application is complex or does not proceed.
- Complex loan fees: If a loan requires significant extra work, as in the case of a bad credit history, unusual income structures, commercial loans, or self-managed superannuation fund (SMSF) applications, a broker may charge additional fees beyond the lender’s commission.
Not all brokers operate the same way, which is why it’s important to ask about fees upfront.
6. What Is Your Process For Assessing My Financial Situation?
A mortgage broker should take a thorough approach when assessing your financial situation. This process usually includes:
- Reviewing your income, employment stability, and existing debts
- Assessing your credit score and financial history
- Understanding your future financial goals and homeownership aspirations
- Evaluating your loan affordability, including repayment capacity
- Identifying any potential lending challenges and working on strategies to overcome them.
A good mortgage broker will ensure they gather a full financial picture before recommending a loan.
7. How Do You Match My Needs With Suitable Loan Products?
Asking this question will help you get insights into your broker’s thought process when recommending you a product.
Not everyone’s situation will be the same when they apply for a mortgage. Furthermore, you might be looking for a loan option that has features such as extra repayments, redraw, or offset facilities.
There could be certain benefits, discounts, or risks involved in what you want. Make sure to ask your broker why they have ruled out other lenders when they make a recommendation.
Loan-Specific Questions
8. How Much Deposit Will I Need To Obtain A Home Loan?
It’s best to get this out of the way beforehand.
While a 20% deposit is ideal to avoid Lenders Mortgage Insurance (LMI) and minimise risk, there are lenders that allow you to borrow up to 95% of the property value with just a 5% deposit.
However, your broker will advise you to budget for an additional 5% of the property value to cover costs like stamp duty, legal fees, and other charges. LMI will apply if your deposit is below 20%, increasing the overall loan cost.
If you have a guarantor or a gifted deposit, inform your broker upfront so they can assess your deposit amount accurately and explore suitable loan options. Knowing your deposit requirements early helps you plan your savings strategically.
9. How Much Can I Borrow Based On My Income?
Your borrowing capacity depends on factors like your income, family size, location, existing debts, loan type, and lender policies.
Asking your mortgage broker this question ensures you get a more accurate borrowing assessment. They can analyse your financial situation, factor in different lender policies, and suggest ways to improve your borrowing power. This helps you set realistic expectations before applying for a loan.
Alternatively, you can use our How Much Can I Borrow calculator to get an estimate.
10. Should I Go For A Variable Or Fixed-Rate Home Loan?
“Fixed or variable?” is quite a common question among first-home buyers.
It’s also a question our mortgage brokers receive on a daily basis.
Mortgage brokers are well aware of the market rates and will educate you about your requirements.
So, be sure to ask this question, as you may need to consider the pros and cons of both.
11. Are There Options For Making Extra Repayments?
Making extra repayments can help you pay off your loan faster and save on interest in the long run, so it’s worth asking about this feature before committing to a mortgage. Some loans allow unlimited extra repayments, while others limit how much you can repay or even charge penalties, especially for fixed-rate loans.
Asking your mortgage broker about this feature ensures you understand your options and choose a loan that aligns with your financial goals.
12. What Fees And Charges Are Associated With The Loan?
Buying a home can be expensive if you take into account several fees and charges that you might incur.
These might include application costs, processing fees, valuation fees, stamp duty surcharges, and Lenders Mortgage Insurance (LMI).
It’s always best to ask your broker about the fees and charges that you have to pay. And if there are any you can avoid paying.
Costs and Financial Implications
13. Can You Provide A Breakdown Of All Potential Costs?
An experienced mortgage broker should be able to provide you with a full breakdown of potential costs, including:
- Loan application fees
- Valuation fees
- Settlement fees
- Ongoing loan account fees
- Exit fees (if applicable)
- Lenders Mortgage Insurance (LMI) costs
- Government duties and stamp duty
This breakdown helps you understand the total cost of borrowing beyond just the loan amount.
A good broker can help you find ways to reduce or avoid certain fees, such as by negotiating with lenders or choosing specific loan products.
14. Are There Any Early Repayment Penalties?
If you plan to pay off your loan early, it’s important to ask your broker about early repayment options and potential penalties.
In general there are two cases:
- Variable Loans: Generally, no penalties for early repayment or paying off the loan early.
- Fixed Loans: Exiting a fixed-rate loan before the term ends may result in break costs, which depend on interest-rate fluctuations and the remaining loan term.
Process And Documentation
15. What Documents Will I Need To Provide?
The documents you need may vary on a case-to-case basis.
Request a document checklist to ensure you’re fully prepared.
16. How Long Does The Mortgage Process Take?
Generally speaking, the time from submitting a home loan application to reaching the settlement is 4-6 weeks.
However, it depends on factors such as the state you live in, the complexity of your application, and how quickly you get approval for the loan from the lender.
That is why you should always ask your broker how long your home loan process will take, as they are well informed of your situation.
17. How Do Existing Loans And Credit Cards Affect My Application?
Lenders assess your existing loans, credit cards, and personal debts when determining your borrowing power. They consider:
- Your total credit limits, not just your outstanding balances.
- Minimum monthly repayments on all existing debts.
- Your overall debt-to-income ratio.
If you have debts, your borrowing capacity may be reduced. A mortgage broker can help you explore strategies to consolidate or reduce debt, improving your chances of loan approval.
18. How Much Will LMI Cost, And Can It Be Avoided?
Lenders Mortgage Insurance (LMI) is usually required when borrowing more than 80% of the property’s value.
The amount charged is determined by lenders. Each will have their own rates according to the LVR at which you are borrowing.
Since LMI can be a major expense, ask your mortgage broker if you qualify for an exemption.
Some lenders waive LMI for specific professionals or high-income earners. You may also avoid LMI by using a guarantor for your home loan.
To get an estimate, you can use our LMI Calculator, but speaking with a broker will give you a clearer picture of your options. Avoiding LMI could save you thousands on your home loan.
Government Assistance And Incentives
19. Can You Assist With The First Home Owner Grant Application?
Your broker can help you apply for the FHOG once your solicitor has given the clearance.
20. Are There Other Incentives I Should Be Aware Of?
A knowledgeable broker should inform you about support such as the First Home Owner Grant, the First Home Guarantee, and stamp-duty exemptions, which may help reduce costs.
Talk To A Mortgage Broker!
You and your mortgage broker need to work together transparently to figure out your best home loan option. Asking the right questions will help you stay on top of your situation.
If you’re thinking about getting a home loan, speak with one of our mortgage brokers by calling us on +1300 889 743 or filling in our free online assessment form.