Ten questions to ask a broker that can save you $100k

A good mortgage broker charges you nothing (they are paid trail by the lender) but costs you a great deal if the relationship goes wrong. These are the ten questions we recommend you ask at the first meeting. Their answers tell you whether this broker is going to represent your interests or the lender’s.

1. Which lenders are on your panel, and how many have you written with in the last 12 months? A broker’s panel is the list of lenders they can access. Some brokers’ “panel of 40” is effectively 3 lenders in practice. If they haven’t written with a lender in a year, their relationships with that credit team are stale.

2. Which lender are you recommending for me, and why not the other four? The answer should reference your specific profile, not generic product features.

3. What commission are you receiving on this loan, and is there a clawback? Upfront commission is 0.55-0.70% of the loan amount; trail 0.15-0.20%. Clawback means if you refinance within 12-18 months, the broker must repay the upfront commission. This creates an incentive for brokers to recommend “sticky” products.

4. If this loan doesn’t suit me in two years, what is your process for reviewing it? Good brokers review annually; average brokers wait for you to call.

5. What happens if I want a lender that isn’t on your panel? The honest answer is “I can’t help you and I’d suggest a colleague.” Brokers who claim they can service every lender are usually exaggerating.

6. What is your credit approval rate on first submission? An experienced broker submits clean; they should be above 85% approval on first submission. Frequent resubmissions are a sign of sloppy pre-submission work.

7. Who packages the file - you or an admin team? Broker support staff processing your file is standard. Just confirm someone senior is reviewing credit calcs before submission.

8. Can you show me three comparable rates in writing? If the broker can’t produce quotes from three lenders in writing, they are product-pushing, not advising.

9. What are the break or exit costs on this product? Fixed-rate break costs, discharge fees, clawback on cashback, package exit fees - the broker should know all of them for the recommended product.

10. What’s the one thing that would change your recommendation? The answer shouldn’t be “nothing”. If a broker can’t articulate a scenario where the recommendation changes, the recommendation isn’t really analysis.

Ask all ten. The conversation tells you more than any review ever will.