A dramatic increase in the number of lenders has highlighted the need for greater research when applying for a home loan. Being such a highly important research matter in life, it is advisable to consult with a home loan mortgage broker.
The process of purchasing a property requires managing abundant personal information and large sums of money, which can be stressful.
With a wide variety of new lenders entering the marketplace, choosing a lender you are comfortable with can feel overwhelming.
Fortunately, there are steps you can take to help in your research process for correct home loan find an excellent mortgage broker.
Trust your gut and be wary of behaviour or hints that may suggest something isn’t quite right
Your first step should be to speak to a mortgage broker who is a member of the Mortgage and Finance Association of Australia (MFAA).
The MFAA maintains high ethical standards for its brokers and ensures its members meet industry-leading educational criteria in Australia. MFAA member mortgage brokers will be able to educate you on the variety of reputable lenders available to you.
There are a number of government-operated organisations and websites that provide tools and opportunities to help you to conduct checks.
The Australian Prudential Regulation Authority (APRA) is an independent authority that supervises deposit-taking banking institutions. APRA licenses the bank, and it is subject to ongoing supervision to ensure it is managing risks and meeting regulatory requirements. APRA-regulated banking institutions are licensed; you can check if the potential bank is licensed by APRA’s requirements here.
There are many lenders out there, and some aren’t deposit-taking institutions or banks, and therefore don’t need to be licensed and supervised by APRA. There are generally two types: private lenders or mortgage broker managers/white-label lenders. Private lenders are able to provide you with credit and operate as a lender because they lend their own private money, and they aren’t deposit-taking organisations (that is, you can’t deposit and save money with them). Mortgage managers and white-label lenders, on the other hand, offer credit and loans, such as mortgages, but do so on behalf of other financial institutions, such as banks. Again, they don’t take deposits.
Whilst private lenders and mortgage managers/white-label lenders don’t need to be licensed by APRA, they do need to be licensed by the Australian Securities and Investment Commission (ASIC) and require an Australian Credit Licence (ACL) if they engage in lending regulated by the National Credit Code, which includes making loans to buy residential property.
If you find that Apra has not licensed a potential home, this should not be a concern, provided that they hold an Australian Credit Licence. You can check this via ASIC’s search tool here.
Also, all Australian companies must be registered with ASIC. Helpfully, the ASIC website has several registers that you can search for free, including the Organisations and Business Names register. This indexes Australian corporate and registered business names. and also includes some incorporated associations.
If the business is not a company (such as a sole trader, a joint venture or a partnership), it will need to be registered on ASIC’s Business Names Register.
They must also provide an Internal Dispute Resolution (IDR) service. Check the lender’s website and call and ask their representatives. If the entity you are considering dealing with is not an AFCA member, the MFAA recommends you seek appropriate legal and/or financial advice or steer clear of that particular entity, as AFCA membership is a statutory requirement for such lenders.
Finally, it is always advisable to deal only with a business that has publicly listed contact details. You can always call the number provided to confirm its legitimacy and consult with your broker
If there is anything you are unsure about, contact your local Nice Home Loan’s Mortgage Broker.
