Mortgage Brokers: directory of firms

Suggesting or assisting with a particular credit contract is credit activity under the National Consumer Credit Protection Act. A broking business either holds its own credit licence or operates as a credit representative under someone else's. Both are equally legitimate; what matters is that one of them is true.

ASIC expects credit representatives who give third-party home loan credit assistance to hold at least a Certificate IV in Financial Services (Finance/Mortgage Broking) and to complete 20 hours of continuing professional development each year. A credit representative's authorisation also has no effect unless they are a member of the Australian Financial Complaints Authority at the time it is given, which is why AFCA membership is worth confirming rather than assuming.

ASIC's Professional Registers Search is the public check, and it takes about two minutes. Choose the list you want from the Select Register drop-down: Credit Licensee if the business holds its own licence, Credit Representative if the individual works under someone else's. Moneysmart tells borrowers to search both lists before meeting a broker.

The best interests obligations sit in Part 3-5A of the National Credit Act. ASIC's Regulatory Guide 273, issued on 24 June 2020, sets out what it looks for when assessing compliance. In practice the duty means a broker cannot simply present the loan that pays them best and call it a recommendation.

You can hold them to it out loud. Moneysmart suggests asking why this particular loan is in your best interests, what kinds of lenders the broker cannot access, and whether the commission differs between lenders. A broker who cannot answer the third question clearly is worth a second look.

Separate from the broker's duty, the credit provider has responsible lending obligations under Chapter 3 of the National Credit Act, explained in ASIC's Regulatory Guide 209 (issued 9 December 2019). The lender must make inquiries into your financial situation, verify what it can, and not enter into a contract that is unsuitable for you.

This is why a home loan application asks for far more documentation than the loan amount seems to warrant. If a broker suggests understating expenses or overstating income to get an application through, stop. That is not a shortcut, and it exposes you to a loan you may not be able to service.

Going direct to your own bank gets you that bank's products and nothing else. A broker works from a panel, which is wider, but no panel covers the whole market. Moneysmart's advice is to ask what sort of lenders a broker works with and what kinds they cannot access, then decide whether the gap matters to you.

A broker should present more than one option and explain how each works, what it costs and why it suits you. If you have a preference for a particular lender, say so, and still ask to see loans from other lenders alongside it so you have something to compare.

Start with the broker and say plainly what went wrong and how you want it fixed. If that does not work, put a formal complaint in writing to the broking business. If it is still unresolved, take it to AFCA, which is free to consumers, independent, and whose determination the firm must comply with if you accept it.

Time limits matter. For most complaints you should come to AFCA within six years of when you first became aware of the loss, or within two years of the firm's final internal response, whichever comes first.