Mortgage broking questions

mick123 on 20/03/2018 - 22:49

Hi guys, It's been 14 years since I last applied for a home loan so please bear with me if these questions may seem silly to some.

Ok so I am looking to get loans arranged for 2 IPs in the next 8 months.

My questions:

  1. I assume from memory, once I fill in a questionnaire, he/she will be able to advise which banks will lend me my requested amount (or the max amount), and their current rates etc. ie. They do not make an application to each bank at this time. Once I am satisfied with a bank and package/rate etc, they will then ask for pre-approval to that bank only. Is this correct?

  2. Will going to different brokers to get different "deals" affect my credit score? One person told me to go compare with 3 different brokers. If they are able to tell me their offers before submitting an application, that is fine, but I assume once an application is made by a broker with a bank, this then affects my credit score. Or is this a myth?

  3. From people's own experience - large broker (Aussie/Mortgage Choice/Smartline etc) or small local independent broker?

Thanks in advance

Financial

Comments

  • John Kimble on 20/03/2018 - 23:04
    +2

    Yes.
    No.
    Depends.

  • tg786 on 21/03/2018 - 00:59
    +2

    1. The good ones will calculate how much you can borrow then try match up a product that best suits your needs ie investment loan, best "package" deal etc not necceasrily the best rate but the best overall product perhaps you want a credit card as well fee free etc? The bad ones will pick whichever bank pays them the most commission and try push you towards them solely for that purpose.

    2. Generally they should not be submitting applications for your loan until your settled on the bank your going with it's not like they apply at 5 banks and then see which ones you are accepted in - its more try for one and if that doesn't work then look at alternatives so no it shouldn't effect your rating at all.

    3. That's a tough one there's benefits and dangers to both. It's more important to find one that cares about what's best for you rather than seeing you as potential commission. I would say if they are pushing for a certain bank right off the bat then maybe they aren't looking into what's best for you.

  • chumlee on 21/03/2018 - 05:00
    +1

    If you haven't been following the royal commission into banks then i will let you know mortgage brokers will do anything including falsifying information to get you approved so you will be fine.

    • one man clan on 21/03/2018 - 09:48
      +1

      That guy from CBA was classic deflective though - the royal commission is into banks and he starts shooting straight at mortgage brokers. Was a bit bullshit

      • chumlee on 21/03/2018 - 09:50

        I think the banks are deliberatly making mortgage brokers look shocking as they want to get rid of broker commissions but none of the big 4 want to make the first move.

        ASIC will do it for them now

        • one man clan on 21/03/2018 - 09:50

          So that's why they volunteered for the royal commission after fighting it for years…

        • chumlee on 21/03/2018 - 09:53
          +1

          @one man clan: i agree. They had a plan through the ABA on what outcome they wanted out of the royal commission otherwise they could have fought it til labor is elected one day

  • sweefu on 21/03/2018 - 10:18
    +1

    Broker here:

    1. Correct. Once you've provided some income verification docs, confirmation of savings balance etc the broker will be able to confirm your borrowing capacity with each lender and give an overview of their rates and fees.

    2. Going to chat with a broker won't impact your credit score. It's a good idea to meet a few an see who you want to work with.

    3. I may be biased (I run a small brokerage), but I would always use someone local and not part of a large franchise. I use the same theory with my accountant, financial advisor, solicitor etc.

    • mick123 on 21/03/2018 - 20:44

      Thanks everyone.

      Yes, sorry sweefu, I didn't word it clearly, I knew going to a broker would not affect credit score. I meant to ask along the lines of, if I went to 3 brokers and they all needed to submit applications to a bank to see their offers, then would that affect it.

      But as you and others have said, the broker does not need to apply to get an idea of what they could offer me.

      Thanks

  • boomramada on 21/03/2018 - 13:26
    -2

    Credit score does not effect on for homeloans.

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