When it comes to mortgages, it's important to understand that brokers are in the business for their own benefit. They may tell you about the number of loans they have closed, but they won't provide much information about the mortgage process. If you want a lower rate than what they offer, you need to ask for it. Your mortgage broker won't necessarily guide you to the best rate for you, so if the rate they quote seems too high, negotiate or look for another broker who is more willing to change it.
Most brokers only work with a few lenders on your behalf. Never sign blank forms or leave details for the broker to complete later. If you feel pressured to sign, take some time to think about the loan. It's also a good idea to check with your state's professional licensing authority to make sure that the broker has a valid mortgage license.
Your mortgage broker may also ask you about mortgage insurance and whether you prefer a fixed-rate or variable-rate mortgage loan. The Dodd-Frank Act prohibits brokers from charging hidden fees or basing their compensation on the borrower's interest rate. You can also check with the ASIC or the Australian Mortgage and Financial Association if you're unsure. This is true and new regulations have been put in place that make loans with low rates as safe as those with higher rates.
You can find a highly reputable mortgage broker whose reputation is impeccable, but remember that they are in it for the money. A good mortgage broker will not only understand the needs of a prospective homeowner, but they will also have spent time understanding the key features, loan terms, and benefits of different mortgage lending options available on the market. The best way to find a mortgage broker is through referrals from family, friends and your real estate agent. If you don't know your credit rating, assets, and purchasing power, a mortgage broker won't be able to help you much.
If your credit score is 600 and you have unpaid bills, there's not much a mortgage broker can do for you. Once you get a loan and the lender that best suits your needs, your mortgage broker will work with the bank's insurance department, the closing agent (usually the title company) and your real estate agent to ensure that everything runs smoothly until closing day. Ask your mortgage broker which option may be best suited for you depending on your financial situation.