What does a mortgage broker do?

What mortgage brokers do

A home loan broker typically collects information about the person, the property and the purpose of the loan, then helps identify loan products that the broker is authorised to submit. They may prepare an application, explain conditions, and liaise with the lender until a decision. They do not approve the loan. The lender does.

Mortgage brokers are commonly paid commission by the lender when a loan settles. Australian mortgage brokers also operate under credit law obligations, including disclosure requirements and, when providing credit assistance, a duty to act in the consumer’s best interests and give the consumer’s interests priority where conflicts arise. Ask the broker how they are paid and which licence or credit representative arrangement covers their work.

Mortgage broker versus bank

Going directly to a bank means you see that institution’s products and policy. A mortgage broker may be able to submit applications to more than one lender, subject to their panel and licence. “More lenders” is not the same as “every lender”, and it is not a guarantee of a better rate. Some people prefer a single bank relationship. That is a preference, not a rule.

The initial conversation

An early conversation is usually about purpose (live in the property, invest, build, refinance), how soon you need finance, income type, existing debts, savings, and whether a property is already under contract. A useful conversation is specific. Vague “pre-approval in principle” language without numbers or conditions is not an approval.

Information commonly requested

Identification, payslips or tax returns, employment details, bank statements, a list of loans and credit cards, rental statements if relevant, and the contract of sale or a property address. Brokers request this because lenders will. The Broker Room calculators do not collect it. An enquiry on this site is not a credit file.

Lender comparison, at a general level

Comparison, when it is done properly, looks at eligibility first, then rate, fees, features such as offset, and policy fit for the property. A comparison rate can help with advertised cost. Policy fit (whether that lender will actually accept this apartment, this overtime, or this construction contract) is often the larger issue. No public ranking on this website replaces that work.

Credit assessment versus broker preparation

The broker prepares and submits. The lender assesses. Serviceability, valuation, genuine savings, and security policy are the lender’s tests. Two lenders can reach different answers on the same file because their tests differ. That is not an error in the paperwork. It is how credit policy works.

Before an application

Before anyone submits an application, it is reasonable to know: the purpose of the loan, a price or refinance amount, the state, a sense of deposit and purchase costs, and the conditions attached to any pre-approval. Use home loans explained and the property plan so government charges are not a surprise at settlement.

After an application

The lender may request more documents, order a valuation, and issue conditional then unconditional approval. Formal approval still sits with the lender. After settlement the mortgage is registered and the loan is serviced under the contract. Complaints about credit conduct can be taken to the Australian Financial Complaints Authority where the licensee is a member. That is a legal pathway, not a Broker Room service.

Questions consumers should ask

• What Australian credit licence does this business work under?
• Which lenders can you actually submit to for my situation?
• How are you paid, and what do you have to disclose?
• What would stop this application at valuation or at policy review?
• Is this pre-approval conditional, and when does it expire?
• What fees do I pay if the loan does not settle?

For South Australian property-cost context, read the Adelaide mortgage broker guide. The Broker Room does not publish broker rankings.