In one of my earlier posts, I talked about the inequality in the power dynamic between a professional service provider and you, as their customer. I mentioned how some service providers use their greater knowledge to exploit you, padding out their services with unnecessary extras, signing you up to unsustainable contracts, or offering you ‘special deals’ that are anything but special. It’s a pretty shoddy way of operating, but it definitely happens.
Obviously, a decent broker won’t let any of these things occur. But, a really great broker will go one step further.
In this post, I’m going to talk about how the best mortgage brokers will actually use their position of authority to empower you, rather than exploit you. Just like superheroes using their powers for good, not evil! I count myself as a member of this team, both as a superhero and as a great mortgage broker. Want to know what my superpower is?
It’s simplifying complex lending information for my customers, to help them understand their own finances and assess the loan options that are available to them.
Yep, pretty great…I know it’s not as cool as flying or invisibility, but I find it comes in pretty handy!
I also believe it’s the key difference between an adequate mortgage broker and a great one.
So, what makes an adequate mortgage broker?
An adequate mortgage broker will try and find a good deal for you. They’ll make sure they get the basics of your financial circumstances, and they’ll calculate your capacity for repayments. They’ll look at some options for loans, probably from a few reputable lending bodies, and then they’ll make a recommendation to you.
Sounds okay, right?
It is okay – but it could be a lot better.
So, what makes a great mortgage broker?
They seek a comprehensive understanding of your circumstances.
A great mortgage broker will do things a little differently, right from the beginning. Firstly, they’ll seek more comprehensive information about you and your circumstances. Just like an adequate broker, they’ll need to know the basics of your financial status, but they’ll also ask about your goals for the future, your ongoing lifestyle preferences (with regard to your finances) and your current financial objectives, existing loan arrangements and budgetary needs. They might ask some fairly blunt questions, and they might tell you some hard truths about what’s possible for you, but realism is essential, on both their part and yours. An accurate and full understanding of your financial position will enable your broker to make an informed and nuanced evaluation of the available options to find the best deal for you, not just an okay one. Think tailor-made, rather than one size fits all! On this note, a great mortgage breaker is unlikely to consent to a rebate of their trails when they secure a loan for you. Trails compensate for their low initial commissions received for their services. A great mortgage broker knows they work hard and deserve every cent.
They tell you if they don’t think a loan arrangement is right for you.
You may have already heard me going on about this one, but it’s important. Mortgage brokers have a responsibility to their customers to make every detail of a loan clear, and what it will mean for them. This includes ongoing fees, hidden costs that can arise at any stage, conditional factors, and potential risks. Your broker might mention a loan arrangement that sounds good on paper, so much so that you’ve grabbed a pen and you’re ready to sign on the dotted line before they’ve even finished speaking. But, if your broker warns you after further investigation that they believe the arrangement would be ultimately unsustainable or unfavourable for you, it’s probably a good idea to listen to them. It would be just as easy to let you go ahead, so if they don’t, there are good reasons. Let them tell you what they are.
They’ll make a shortlist to discuss with you.
A great mortgage broker will work with you to find the best loan arrangement for your needs. Rather than make a recommendation about what they think is best, based on a superficial understanding of your situation, they’ll make a shortlist and discuss your options with you. When it comes to money, you will have your own needs and wants, and you should be given the opportunity to express these. Your broker can then offer more insightful advice, informed by your input.
All these factors require your mortgage broker to act with you, rather than above you. That’s what a great broker will do. They’ll instigate a relationship between you that’s based on collaboration, rather than dictation. Throughout the course of your interaction, they’ll seek to educate you, placing the control over your financial future in your hands. They’ll be honest with you, even when it’s hard to hear, because there’s no trust without transparency. A great broker won’t make themselves completely redundant – someone has to do all the work behind the scenes once you’ve agreed on a loan! But, they will want you to be empowered, and feel good about the decisions you make.
Ultimately, that’s the best measure of a great broker – how satisfied their customers are.