Mortgage Brokers are now the number one choice for consumers who are seeking a home or investment loan or to refinance their existing loan. They can also assist with motor vehicle finance and personal loans.
Finance brokers assist business owners and companies with their financial requirements. This can range from business and commercial loans to assist with cash flow management and to fund the growth of their business, through to asset finance covering the leasing of motor vehicles, plant and equipment and machinery.
As the lending market becomes increasingly complex, more people are turning to mortgage and finance brokers. Here are some of the reasons why:
Brokers can save you time
The choices now available in the mortgage and commercial lending market can seem limitless and completely overwhelming. You can choose to research the subject, the lenders and their products yourself, or work with a broker who already has that knowledge and information to hand.
Brokers can help you find the right loan or financial solution
The best deal is not necessarily the cheapest interest rate. A good broker will examine your circumstances and future plans to recommend a loan or financing solution that is right for you. Brokers work with you to determine your finance needs, repayment ability, and cash flow requirements to select a loan or financing solution suited to your circumstances and manage the entire process, from application through to settlement and on-going assistance with your financial needs.
Some benefits of using a broker
• They do all the research and provide you the most competitive solutions for your specific need(s)
• Have access to a wide range of loans/lenders
• Understand the market and the available products
• Provide greater flexibility/options than one lender
• Greater expertise as they focus on lending only
Types of broking
Brokers can specialise in areas such as:
• Residential loans/mortgages
• Reverse mortgages/equity release
• Car and personal loans
• Business/commercial loans
• Commercial property finance and construction development funding
• Asset finance (eg. leasing and hire purchase requirements relating to motor vehicles, office equipment, plant and machinery)
• Debtor finance (eg. invoice discounting)
Panel of lenders
Brokers can only offer loans and finance from the lenders they are accredited with. They call this their panel of lenders. Lenders will normally range from the major banks through to specialist non-bank lenders and mortgage managers and originators. The size of a panel of lenders will vary from broker to broker. You can ask to view BMG Financial Services’ panel.
Why use an MFAA member?
MFAA members must adhere to the industry Code of Practice which requires 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
New national regulation for the credit industry, including mortgage brokers commenced on 1 July 2010 and is known as the National Consumer Credit Protection Act (NCCP). Changes include that credit for residential property, including residential investment property, is regulated nationally by the Australian Securities and Investments Commission (ASIC). Note that some state laws and regulations continue to exist, such as maximum interest rate caps in ACT, Qld, NSW and Victoria.
Finance broking contracts (FBCs) were mandatory in NSW and Victoria until 31 December 2010. However, from 1 January 2011, a new phase of the NCCP is in effect that requires that Credit Guides and Credit Quotes be provided to potential borrowers. These documents are designed to give borrowers pertinent information about their rights and obligations under the NCCP.
Another very important aspect of the NCCP is the concept of “responsible lending”, because it requires all persons involved in the provision of credit for ‘personal, domestic or household use or consumption’ to make sure that the borrower is able to make repayments on a loan (or lease) without substantial hardship. In other words, loan products must be ‘not unsuitable’ based on the objectives and needs expressed by a borrower.