As of April 1st, all mortgage brokers who offer reverse mortgages to senior borrowers must be accredited with the industry body, SEQUAL or they will face expulsion from the industry.
In a positive development for consumers and the industry, the Mortgage and Finance Association of Australia (MFAA) has ruled that mortgage brokers who have not completed the SEQUAL training and accreditation course can no longer provide a reverse mortgage to a borrower until they have done so.
Although the vast bulk of mortgage brokers are professional and do a good job, there are still some ‘cowboys’ who just chase a fast buck with scant regard to the actual needs of customers. This new ruling will make it much more difficult for these dodgy brokers to operate in the senior’s market.
If you’re seeking a reverse mortgage or equity release plan, and you’re using a broker to assist with the transaction, you should ask your broker the following questions upfront:
- Are they accredited with SEQUAL? If so, ask for evidence.
- How many lenders do they have access to? They should have at least four.
- What are their charges?
A good broker will generally not charge you directly, as they receive a commission from the lender. For a better idea of what a reverse mortgage broker should offer, check out the Voluntary Code of Conduct recommended by Seniors First here.
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Surely brokers had to be trained! At least it is being rectified now.