Borrowers are currently in an excellent position, with low rates on offer everywhere you turn and eager mortgage managers keen to negotiate if it means retaining your custom. But how do you know when you’re getting a good deal, as opposed to an average one? How do you compare apples and oranges with apples and apples and is it enough to do your own homework these days?
Remember, we’re talking about a significant financial (and time) commitment – the largest you stand to make in your life – so even a small percentage saving on your home or property investment loan(s) can make a monumental difference to your bottom line.
Australia’s mortgage broking industry is ever growing, with more punters turning to the professionals in a bid to mediate what can be an intimidating, back and forth process with bank managers, on their behalf.
So what can a mortgage broker bring to the table that ‘the average’ homebuyer or investor might miss out on by going it alone?
1. More timely research
You know how long it can take just to pick a bottle of milk from the supermarket fridge stacked with dozens of dairy varieties (doesn’t it just come from a cow?). So imagine the time you stand to spend sifting through hundreds of different loan products, all with their own fine print!
Sure, there are online comparison sites to help you these days, but in order to get the nitty gritty on each loan package, you’ll still have to go directly to the individual providers. A broker can do this legwork for you in minutes, comparing all the different lenders on our panel and leaving you with more time to shop around for the perfect property.
2. Making the most of our mates
You wouldn’t really call them mates per se, but mortgage brokers do have good working relationships with the many different lenders we work with every day. This gives us inside knowledge when it comes to certain intricacies involved with different lenders and their application processes, including approval times.
If you’re in a hurry, we can potentially speed the paper pushing up a little and we can certainly tell you which lenders will be more accommodating in their negotiations and assessment of your capacity to borrow or refinance.
3. Product comparison
No two loan products are rarely identical. There always tends to be a clause or option here, or a fee or feature there that’s adjusted slightly according to the lender and the applicant. Brokers can work through the different packages with you, making the process of comparing suitable options a lot more streamlined to ensure you get the best possible deal.
4. Understanding structures
This is an essential benefit of the broker relationship for property investors in particular. Especially when it comes to refinancing in order to purchase further real estate assets. An experienced broker who understands the finer details of building a property portfolio will be able to guide you as to the best debt structure for your overall investment strategy, making sure you don’t get tied up in messy, cross securitised loans and risk locking away your all important collateral.
5. Paper pushing
The reams of paper attached to residential mortgage products can be downright intimidating. A broker can help in completing everything from pre-approvals to settlement documents on your behalf and will make sure they reach the right desk at the right time. Generally, all you need to supply is evidence of serviceability (income and expenses) and proof of identification and we can do the rest. Because the last thing you need is the stress of a delayed property settlement by banking bureaucracy.
6. Insider knowledge
Given that mortgage broker services generally come with no upfront costs to the purchaser, the value we bring to the table is almost immeasurable. Particularly when you consider the experienced broker’s intimate understanding of the financial services industry and how this particular beast operates.
Further, brokers often have access to market data that can help in your due diligence and suburb analysis research, which may not be freely available to the public.
So next time you need a mortgage or are looking to refinance your property portfolio, consider the potential value a mortgage broker can bring to the table and ask yourself, with access to a service that stands to save you thousands, yet will cost you nothing, can you really afford to go it alone?
About the Author
Since 2008, David Thomas has built a business aimed at servicing the needs of property investors, owner occupiers and small business owners. David is recognised as one of the top 10 independent mortgage brokerages in the country, David and his team have settled almost billions of dollars worth of residential and investment loans over the last decade.
Known for his straightforward, relatable style, David believes by educating people about property funding; they fare better in the market. By sharing his expertise openly, some of the people he educates will likely become his clients. It's a win-win approach.
David Thomas is a credit representative (Representative Number 506153) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237).