Join us for part six of our myth-busting blog series as we address some misconceptions about mortgage brokers.
Mortgage broking is a relatively new industry compared to others that seem to have been around since the world began. But despite being only a couple of decades young, mortgage broking is a very well established, regulated and governed industry.
Mortgage brokers are regulated by the Australian Securities and Investments Commission (ASIC), an independent Commonwealth Government body which works to keep Australia’s financial markets fair and transparent.
People who provide consumers with credit must be licensed and authorised by ASIC, and minimum requirements around training have to be met. Mortgage brokers used to be governed by state laws, but the National Consumer Credit Protection Act 2009 (NCCP) replaced this to bring all credit providers under the one national law.
NCCP protects consumers by ensuring that the loan a broker finds for a borrower is suitable for their situation and personal circumstances. This puts the responsibility as much on the broker as it is on the lender to ensure the borrower’s best interests are front of mind when providing credit advice.
When choosing a mortgage broker, protect yourself by always making sure you:
- Choose a licensed broker. Unlicensed brokers are illegal operators which means you mightn’t be protected if things go wrong. You can check if a broker is licensed by searching ASIC Connect’s Professional Registers.
- Choose an accredited mortgage broker. National bodies like the Mortgage & Finance Association of Australia (MFAA) represent professional credit advisers, and hold their members to a code of conduct that covers professionalism, ethics and minimum education standards.
- Complain if things go wrong. Try to resolve any problem with your credit provider or broker first. If you aren’t satisfied, go to ASIC’s how to complain webpage for information.
More than 50% of borrowers now use a mortgage broker to get a home loan, so that’s a pretty good sign!
Were you unsure about using a mortgage broker but are glad you did? Share your experience in the comments below.
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