Finance Broker Perth
What is a Finance Broker?
A finance broker is someone who essentially acts as a middleman between a loaner and a loanee, helping the loanee to secure a loan or mortgage from the loaner. By hiring a broker, you are paying someone to find and set up a loan for you.
A broker’s responsibility is to do research in order to find the absolute best loan for his or her client. If you’re attempting to take out a large loan, it’s recommended that you hire a broker to go to work for you.
Does a Broker Have to be Licensed?
In short: Yes. Anytime that you’re using a broker to take out an official loan, that broker must be licensed. There are tons of registered brokers throughout all areas of Australia.
To see if a broker is licensed, you can call 1300 300 630, or use the database at www.asics.gov.au. You can check that a broker is registered using the search form on the top right. It’s recommended that you use a broker who is located in your area.
How Much Does it Cost to Hire a Broker?
The amount you spend on a broker is all determined by how experienced that broker is, and how he or she charges. In general, brokers charge in one of three different ways.
- Fee for the lender – Many brokers do not charge any fees to loanees. Instead, the brokers charge a fee to the lenders of the loan. Lenders are willing to pay a fee because the broker introduced them to a new client. Ideally, this is the type of broker you will work with.
- Fee for both lender and loanee – Some brokers charge fees to both the lender of the loan and the person who takes the loan out. Typically, a one-time commission fee will be collected from both the lender and the loanee.
- Fee for the loanee – The least common type of broker is a broker who collects a fee from only the loanee. If possible, you want to avoid brokers of this sort.
Ideally, you want to use a broker who does not charge you a fee. If you do use a broker who requires a fee, the fee should be no more than 2% of the total of the loan that you take out. There are plenty of terrific brokers who charge within these parameters.
Will a Broker Have My Best Interest in Mind?
There is no clear cut answer to this. While you hope that your broker is ready to do right by you and provide excellent service, some brokers can be motivated by how much money they can make. Before choosing a broker, make sure that he or she has received positive reviews from numerous clients.
There are unscrupulous brokers who will try to gain access to the highest commissions possible. They see you taking out a loan as an opportunity for them to make money. They don’t consider how specific financial products will affect you. Avoid brokers like this at all costs.
Should I Work with a Broker?
While this decision is ultimately your own, it is often a good idea to work with a broker; provided that it’s a good broker. A good broker will help you to find a loan that most appropriately suits your specific needs and purposes.
When choosing a broker, you need to do your research. Don’t just pick the first broker that you come across. Read client reviews. Compare brokers to other brokers. In essence, make an informed decision. You can deal with lenders directly, but a great broker will make the task much, much easier.
Can a Broker Get Me a Loan I’m Struggling to Secure?
In general, a broker will not be able to secure financial products for you that you are not qualified to secure. For instance, if you have a bad credit history or have filed for bankruptcy, there’s a good chance that you will not be able to take out a large amounts of finance products. Unfortunately, there’s little that a broker can do to change this.
Though you might be able to take out a loan with a higher interest rate, it’s not recommended. If you’re already in debt and are trying to pay off your debt by taking out another loan, you should refrain from doing so. This will, in all likelihood, just put your further in debt.
What is a Broker Required to Tell Me?
There are a few things that brokers are required to tell you. As dictated by the National Consumer Credit Protection Act, brokers must give their clients both a quote and a Credit Guide.
A Credit Guide includes important details such as which lender service the broker most often works with, and any fees that may apply. Not receiving a quote and a Credit Guide from a broker is against the law.
What Should I Look for in a Broker?
There are a few key things to look for in a broker. They include accreditation, cost, and past experience. If a broker is not credited, he or she is not legally allowed to be a broker that sets up loans for clients. There are no exceptions to this rule.
If you can, choose a broker who does not charge you any fees. There’s no point in spending money if you don’t have to. Make sure you read reviews from brokers’ previous clients to ensure that the broker is legitimate, and will look out for your best interest.
What do I do if I have a Problem with my Broker?
The biggest problem that loanees have with brokers is brokers setting up inappropriate finance products. These loans are inappropriate in that they don’t suit a client’s specific needs and purposes. If this happens, there are some things you can do.
First, take up the dispute with your broker. If he or she doesn’t relent, you can file a complaint with the External Dispute Resolution Scheme (EDR). After you’ve done this, an independent body will determine whether or not your broker is acting in good faith.