[How to Choose a Mortgage Referral Company: Pros, Cons, Risks and Process] When buying property, refinancing or topping up a mortgage, understand the key factors in choosing a mortgage referral service
Contents
In the past, getting a mortgage required visiting multiple banks, but with the internet now widespread, mortgage brokers have become the preferred choice. These professional firms provide objective advice to help applicants find the best mortgage plan. This article will introduce the role of mortgage brokers and why their services are worth choosing.
A mortgage broker acts as a bridge between the bank and the applicant. Through professional analysis, it helps clients find the most suitable mortgage loan plan. Before buying a home, applicants can first have a free income assessment by the mortgage broker. This helps them understand whether they can pass the stress test and makes the home-buying process easier.
A mortgage broker can help organize your income proof, employment proof and related documents for the bank's assessment. The broker can help you understand the basic requirements and process for a mortgage application, but the final approval rests with the bank.
When choosing a mortgage broker, applicants are advised to avoid signing the estate agency’s mortgage referral form, so as not to affect mortgage offers. Choose a professional mortgage broker to save time during your home purchase, find the best solution, and make your property investment journey smoother.
- Understand the mortgage referral form: save time and get the best mortgage offers
After signing a preliminary sale and purchase agreement, you will likely start looking for the most suitable mortgage plan. However, asking at individual bank branches can be time-consuming and may not be effective. To help you find the most competitive mortgage offers more efficiently, we recommend choosing a professional mortgage brokerage service.
Advantages of using a mortgage broker
1. Latest mortgage offers: Because mortgage brokers handle a large volume of mortgage applications every day, banks are willing to provide them with the latest mortgage offers, so you can keep up to date with the best mortgage rates, cash rebates and other offers from different banks.
2. Professional advice: whether your property is a village house, tenement building, subdivided flat, commercial premises, or another type, mortgage brokers can provide professional advice to ensure you do not waste time on unsuitable banks.
3. Refinancing and top-up services: If you need to refinance or increase your mortgage, the mortgage broker can also provide property valuations from different banks, saving you valuable time.
Choose a mortgage intermediary and get the best mortgage plan with ease
After signing the mortgage referral form, you will be able to make full use of the mortgage broker's expertise and resources to find the best mortgage solution for your home purchase plan. Choosing a professional mortgage broker makes your property purchase more worry-free, time-saving, and effortless.
- [Economic Weekly - Mortgage 101] Bank vs valuer: why can the valuation of a new property differ by as much as 200 million? Hiring a law firm for refinancing with a “no success, no fee” policy? | Chan Wing-kin
Mortgage brokers offer extra rebates to help you get more mortgage offers
When applying for a bank mortgage, whether you go through a mortgage broker or apply directly at the bank, the product terms offered by the bank are the same. If the bank offers cash rebates, the details depend on the terms of the individual bank, so please confirm with the relevant bank.
For example, if the mortgage amount is 400 million, applying through a mortgage broker to a bank may offer cash rebate of up to HK$14,000, which is clearly higher than applying directly at a bank branch. However, when choosing a mortgage broker, you should note its potential pros and cons.
Here is a summary of the pros and cons of applying for a mortgage through a mortgage referral service, for your reference.
Advantages of applying for a mortgage through a mortgage intermediary
- Free mortgage assessment for applicants: mortgage brokers professionally conduct stress tests for applicants and provide details on mortgage rates, cash rebates and offers from different banks based on customer needs. Acting as a bridge between the applicant and the bank, the broker analyses various mortgage plans with the customer's interests as the priority.
- Extra cash rebate: some mortgage brokers offer clients extra cash rebates. Applying for mortgages from different banks through a mortgage referral company does not affect the broker's profit, so they can fairly assess each bank's mortgage offers.
- Apply on your own or appoint a professional mortgage broker: protecting client privacy is the mortgage broker's top priority. For applicants who do not want to provide personal information and documents, some mortgage brokers will provide the contact details of bank staff so clients can speak and submit the application directly. If you want to enjoy the broker's extra offers, simply attach the referral form when submitting the application. Alternatively, some applicants are willing to trust the mortgage broker and provide personal information for the professional team to handle on their behalf. Once the mortgage approval is completed, the broker and the bank will notify the client directly.
- Mortgage offers from banks depend on the bank's current policy. If you arrange the mortgage through a broker, any extra rebates or incentives are provided by the broker itself. Please check the specific details with the broker.
- Mortgage approval standards apply to all types of properties: village houses, tenement buildings, subdivided units, commercial and industrial premises, and more. Mortgage brokers can provide relevant information for all these property types. During the inquiry process, the broker can clearly tell applicants which banks may approve the mortgage, helping save time.
- Mortgage approval standards for various income situations: For applicants with daily wage income, freelancers, self-employed persons, or those unable to provide income proof such as tax returns and MPF records, a mortgage broker can provide one-on-one advice and propose the best solution to obtain bank approval.
- Efficient mortgage applications: choose a professional mortgage broker. Professional mortgage brokers have long-term partnerships with banks and experienced mortgage teams. If you have an urgent mortgage need, a broker can help prioritise your application and speed up approval so you can get funding support sooner.
- Get the latest mortgage offers: a mortgage broker can help. Since mortgage brokers handle a large number of mortgage applications every day, banks are willing to provide them with the latest mortgage offer information. Choose a mortgage broker to get the latest and most competitive mortgage rates, cash rebates and other offer information first, so you can save more on repayments.
- Overcome bank rejection: mortgage brokers help solve your worries. During busy market periods, some applicants may be rejected when applying for a mortgage at a bank branch and may not obtain ideal mortgage terms. However, professional mortgage brokers have good working relationships with various banks and can help you avoid the awkward situation of being turned down by the mortgage department.
- Professional referrals from former mortgage department staff at banks give you peace of mind in choosing: some mortgage referral companies were founded by former bank mortgage staff who know the mortgage business inside out and apply extensive industry experience to provide professional advice. Choosing this kind of mortgage referral company allows you to meet your mortgage needs while also receiving professional guidance on investment and wealth management, helping you plan your wealth better.
Risks and solutions to note when choosing a mortgage broker
In the home-buying process, choosing the right mortgage broker is very important. However, when selecting a mortgage broker, applicants should note the following potential risks:
1. Customer privacy protection issues
Some mortgage brokers may be poor at protecting customer privacy, and some unscrupulous brokers may even sell applicants’ personal data. To make sure the broker you choose is reliable, you can take the following steps:
- Enquire about Pleaseprovide the office address of the intermediary being checked, to avoid choosing a virtual office.
- ViewMortgage brokers' reputation and reviews, such as comments on Facebook pages and Google reviews.
- Mortgage intermediaries who write newspaper and magazine columns are usually more professional and well regarded.
2. Avoid mortgage brokers charging fees on false pretences
Some mortgage brokers may claim that an applicant’s poor income means extra fees are needed to make it easier to obtain a mortgage. Applicants should be alert to this and choose brokers that do not charge such fees to applicants.
3. Potential impact of signing a mortgage referral form
The mortgage referral form authorizes the mortgage broker to submit the applicant's property information to the bank. If the applicant has already signed a mortgage referral form with another company, they may choose to apply with a bank other than the three major banks (HSBC, Hang Seng Bank and Bank of China) to obtain extra rebates.
If the applicant prefers the big three banks, they can switch back to one of the big three banks after the two-year penalty period ends to receive a cash rebate. By refinancing every two years, you can enjoy additional rebates, like having a "honeymoon period".
Choosing the right mortgage intermediary is crucial for homebuyers. During the selection process, applicants should pay attention to the above risks and take appropriate measures to ensure the mortgage intermediary they choose is reliable, professional, and able to provide the best mortgage plan.
4. Mortgage referral companies with uneven professional standards: how to choose the service that suits you best
When choosing a mortgage referral company, you may find that the professional level and service quality in the market vary widely. If you choose an unprofessional company, you may not get the best mortgage plan or interest rate. To help you make an informed decision, we provide some suggestions and a brief introduction to the mortgage referral process here.
Method:
1. Do thorough research: Before choosing a mortgage referral company, do your market research first. Check the company's website and social media platforms to understand its professional background and services.
2. Pay attention to reputation and reviews: check the company's customer reviews and reputation, which can be found on Google Reviews, social media reviews, and other channels. Good reputation and reviews usually mean a higher professional standard.
3. Ask friends and family: Ask whether they can recommend a mortgage referral company, and choose based on their experience and suggestions.
4. Ask professional questions: speak with the staff of a mortgage referral company and ask professional questions about mortgage applications to assess their professional level.
5. Compare different companies: Do not limit yourself to just one mortgage referral company. Compare the services and terms of several companies and choose the one that best suits your needs.
6. Pay attention to customer service: Good customer service is an important sign of professionalism. Check whether the mortgage referral company can respond to issues promptly and whether it has a professional customer service team.
7. Ask about partner banks: Find out which banks the mortgage referral company works with. Companies with good relationships with multiple banks are usually more professional.
Brief introduction to the mortgage referral process:
1. Applicants can first ask the mortgage referral company by WhatsApp or phone about the best offers from each bank.
2. Obtain the mortgage referral form from the mortgage referral company, then choose from the following options:
- Obtain the bank mortgage department staff member's business card and referral form and submit them with the mortgage application.
- Bring the referral form to a bank branch to apply for a mortgage, and submit the referral form when applying.
- The mortgage referral company can help arrange for a bank staff member to contact you and process the mortgage application.
3. After applying for a mortgage, ask the mortgage referral company for the "reward commitment letter" to ensure the applicant receives what is provided by the referral company
Related reading and services
Want to arrange AC cleaning or maintenance?
OPOExpert Air Conditioning provides residential and commercial AC cleaning and maintenance with clear pricing. Enquiry first or book online directly