Well maybe not everything. What I meant is reveal everything in a financial sense, to your mortgage and finance broker. The best way to do this is to treat them as a partner and like any relationship the best ones are based on communication not assumption.
When you engage a broker initially they will need to collect information from you by asking a series of questions such as what liabilities do you have, what is your income and are there any future changes you are aware of that will impact on paying back a loan. They will also gather things like bank statements, payslips, financial data etc that are needed to confirm information. This is all part of a “fact find” process and essentially ensures that they thoroughly understand your financial situation so they are able to recommend the appropriate product, solution and lender for you.
Of course, it’s the brokers responsibility to ask the right questions and seek the right information however, if you’re unsure if something is relevant, that they don't know about, then communicating it to them is the right thing to do, for you and the broker. Whether you are in business and seeking business finance, buying a house or financing a car this is especially important as leaving out any information could mean that you end up with a solution that doesn’t suit your needs and it may result in the loan not being provided.
While this may seem fairly obvious, people do leave out or fail to communicate relevant information on a surprisingly regular basis. Most of the time it’s simply a case of not realising that something is relevant, or needed, and this is where the brokers skill and experience in asking the right questions will come into play. Sometimes however people just don’t feel comfortable, for whatever reason, sharing their personal information and are cautious or reluctant in what they divulge. This often causes incorrect solutions being provided or delays with the application. If it does get through the fact find process and progresses to a loan application with a lender, and is discovered, at best it can be corrected with the relevant information updated, but at worst it may result in the loan being declined.
Another way to think about this is that it's like going to a doctor, because of an illness or injury, and leaving out information about how you feel or the symptoms you have which may mean you end up with a wrong diagnosis or treatment. And yes I know that organising finance is not a life or death situation but you may very well cost yourself time and money or miss out on buying that house, car or business equipment that you need, because your loan is declined.
Brokers are required to capture all the relevant information to assess and recommend any products or solutions. While there are often differences between lenders in the actual information and proof they require, your broker is in the best position to know what to and what not to provide given they have full access to the policies and procedures of the different lenders as well the experience and the knowledge to interpret them. Having said that, like any industry, there are good brokers and not so good brokers so as I explained in my previous Blog “It’s all about the vibe” choosing a good one in the first place is still very important.
And finally, despite what’s recently been played out in the media, brokers are absolutely invested in providing you with the best possible outcome. For starters it doesn’t make business sense not to, but as well as that it is incumbent on them. All brokers in Australia are required legally to be licensed and regulated by ASIC, whilst their activities are regulated under the National Consumer Credit Protection Act (NCCP). Brokers are also required to be a part of an aggregator or franchise group and they in turn regulate who can become a broker and how much experience they need to have as well as providing their own training and compliance regime.
So, if you are looking to make your mortgage and finance broker work for you, potentially saving you time, money and hassle, then it is crucial that you view and treat them like a partner. Communicate fully all the information required and you will get the benefits.