Robert,
Good points. That’s why I use AAPR though, and not nominal rates. I think most investors now understand how the fees and charges can ratchet up the costs over the term of the loan and need to be factored in to the total.
I think there is definately a role for brokers though. I’ve contacted one on this forum myself already. But I don’t think there role is to source the cheapest loan, that’s just the icing on the cake. I see there role as follows:
To maximise my borrowing capacity, and thereby my leverage. I need to know what mechanisms I can put in place to maximise my borrowings. Do I need mortgage insurance. Or can I do other things to max my borrowings. eg. By increasing my cash flow and thereby my servicability. Is my portfolio too -ve geared, and do I need to come back to neutral/+ve. etc etc.
Basically, the brokers role in my team is my money source. His job is to get me as much as he can at the best rate he can. When i need cash I go to the broker. I rely on him to tell me how I need to structure to max my borrowings.
Just my 2c,
Michael.Just remember, the AAPR does NOT count fees charged for usage. For example, two of the lowest basic loans charge $50 and $45 respectively for each redraw. If you do one redraw a year, they move back to a ranking of 8 or 9. a few a year and you have on expensive loan!
Don’t forget to ask your broker about this stuff as well.
I like your attitude though… the broker is the go-to person for money!!!
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdWe were the opposite to what you have stated originally. We have absolutely no loyalty to any particular providers as they all seem to be shafting everyone the same way!!
To get our foot in the property door we had to jump through hoops and all to get the loan (98% if my memory serves me correctly) but our Mortgage broker kept us up to speed on things and helped us out a lot.
When we were looking at buying another property, we went back to broker to look at options. I had no probs breaking and refinancing. As we are now in the door, financing shouldn’t be a real problem.
I do however, plan to keep a VERY close eye on my loans and make sure they are every bit of what was sold to me.
Steph.
Success is 1% inspiration and 99% perspiration.
Robert
Yes, it is the mort/brkers job to hunt down the
best info on finance. However you have to ring him/her first with your request, here is the problem. Do newbies find it easy to trust an agent
to do a good job and do they trust their judgement on making the right decision with the info presented to them when their financial future is at stake? To you and experienced investors borrowing/managing large amounts of money is more
matter of fact, but for a large number of people it can be frightening. This is about to turn into
an essay, so I will try a parable: Robert if your company was profiled on a certain current affairs
and it was deemed that after much research your products where considered of tremendous benefit to the mainstream (in other words endorsed by a respected independant source) and that the process
for adopting this change was painless. It would be interesting to see the response!
Four things:
1. Advertising
2. Ease of conversion from exist-prod
3. Credibility
4 Demonstrated results over a period of time.
Last three things conveyed by a trusted source in
widespread advertising (maybe).The problem with the “independent” current affairs shows is that good news does not sell advertising space. They predominantly preach the doom and gloom and you rarely see a good broker story on TV. In fact, I have never seen one!
I guess if you think about it from a different perspective, if your broker HAS NOT been on TV, then they are doing the right thing!
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdAfter watching “Frontline” on the ABC I have never been able to take current affairs programs seriously.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Fully Accredited With Derivex PTY LTD and IFHL PTY LTD
***Ask about our Interest Free Home Loan***
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
T.M.A
Obviously c/a programs aren’t your favs. Forget
them, I was simply using them as a vehicle. This
question could be broken down into two elements
selling cheaper money and selling Brokers.
I don’t think money stories are bad news and yet
they do sell well. If I know I can get a cheaper deal
through a trustworthy source that justifies the time
investment I will do it every time. I know of people
changing their internet service providers at the drop
of a hat because they can save a few dollars a month
(considerable setup time in those things sometimes).
I have listened to staff room banter, trust me people
love stories about beating the banks and saving money
and reno’s. At the end of the day if people find an
operator in any walk of life, that is outstanding at
what they do, they will knock down a door to get
their services. Do you know a highly skilled broker?
I could get access to, just kidding.
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