The importance of the Mortgage Broker
Many people head straight to their own bank when buying property.
If this is indeed going to be your “strategy”, you may be missing out on some significant benefits.
It really does pay to use a mortgage broker when shopping around for your loan. Even if you want to use your own bank for your mortgage, you can still use a broker to help process paperwork and manage the application on your behalf, and there is no direct cost to you.
Some clients will say that their heart is set on using a particular lender, and even then a broker can be your best friend.
One thing that it is important to make clear, we need the banks to invest in property but you don’t necessarily need to be loyal to one lender. At least consider the options that are out there and talk to a broker about your serviceability and who’s offering good deals out there.
Remember also, it’s not always about the best interest rate either, don’t compromise your loan product with a great lender for a minimal reduction in interest rate with a lender who can nothing for you in the future.
So let’s consider some reasons as to why every borrower should seek out an independent and experienced mortgage broker when trying to obtain property finance. One who has experience with investment lending, and is ideally, a property investor themselves ….
A Mortgage Broker will give you more choice
Remember that your own bank will only ever sell you their own products, they will not tell you that the lender next door has a good range of products, possibly ones better suited to your needs and circumstances right now.
When you sit in front of a broker you are sitting in front of 10+ banks and 50+ products versus visiting a banker who has access to only one bank’s products. In recent times, when the banks have been more inclined to say ‘no’ to investors, by having more choices you’re likely to get a ‘yes’.
You can choose someone who has experience
If you are visiting your own existing lender, ask your lending manager how long they’ve been helping people with investment loans. Make sure they actually have the right experience to help you. An inexperienced broker or lending manager really could scupper a deal for you.
Many brokers own their own businesses and are committed to their clients for the long term, with many years of industry experience. But always check this. The banks on the other hand are big companies who move their staff around and reward good performers with promotions away from their customers. This means you’ll suddenly be dealing with someone completely new who does not know or understand your circumstances. These are critical when it comes to pushing a loan through and getting you to the right lender for THIS loan.
You can choose someone with a specialisation in investment properties
Trust us when we say that many lending mangers at branch level will not understand or have any experience in more complex investment loan structures. If you’re looking to build your property portfolio you need specialised assistance with your loan, so it pays to talk to a specialised broker. And when we say specialised, we simply mean someone who understands and specialises in property investment lending.
So look for a broker who specialises in property investors. Bank staff often don’t have the training or experience in one area, but service whoever happens to walk in to the branch. This MUST be more important to you than being loyal to your lender.
Your broker will follow up
Following up the progress of your loan application is time consuming and frustrating. A good mortgage broker will have a system for chasing you up, keeping you informed and saving you time. They will also be “fighting” in your corner to push the loan application through, and make time to help you with your loan documents and help you get through the frustrations of applying for a loan.
We can’t all be experts at everything and a mortgage broker can potentially be an invaluable resource for those with a poor understanding of the finance and mortgage industry. Remember that lenders change their lending policies regularly, so a broker should be able to find you a mortgage that’s better for your individual situation and affairs, than your own lender who may not actually be able to help you.
If you don’t have the time to do the extensive research required to properly assess the variety of home loan products available to you, if you don’t understand who has a better range of products for you now, and into the future, a good mortgage broker does and can do this for you.