I have afew investment properties but have usually approached the bank direct for finance. I know I am outside of the banks criteria now. This may sound like a ridiculous question But…when applying for finance, is it possible to approach a couple of brokers for finance and see who comes up with the best deal, or is this deemed as unethical as I would hate for them to do all the work and then I have to tell one of them that I will be using someone else.
OR…is this just the nature of the game?
I recently went to a broker for a construction loan and he advised that he wasn't able to get one as I would be a no doc lender therefore the deal fell over. However on talking with another broker, he said he could have got me a construction loan on a lo-doc and could have financed the deal no problem. Is it adviseable to "shop around"?
Regards
Anita
Hi Anita
Of course it is wise to shop around.
Obtaining finance is like buying any commondity.
You wouldn't go to your local mechanic and get a quote to repair the car and if you thought it was a bit on the expensive side just get it done anyway you would get a second quote and compare what both had to offer.
Finance is similar however if you find someone you get on with and appear to now his apples from his oranges and can perform and achieve what you want then you would normally stay with them.
By the way there are a few lenders who provide No Doc construction loans depending on the post code.
In saying all this if you find someone who works well for you and they are professional in their apporach
Richard Taylor | Australia's leading private lender
Hi Anita
this is a very good question and has quite a few answers
It is my experience that many people cast options amongst brokers looking for diverse options which will commonly provide a diversity of feedback based on broker knowledge and presumed product criteria. This is usually without the benifit of intimate client financial knowledge.At the point of sharing your financial and personal details then I would suggest that consideration be given to the professionalism and opinions of the broker. There is a relationship established where legal and moral obligations should be applicable
This is where your delema may have occured and I would suggest you had a broker who had the moral and legal ethics rather than one who is product inept.
This issues of fraud and deception are high on the radar in a low document situation where the applicant is unable to prove enough income to satisfy bank requirements. Where a broker becomes aware of an income declaration being false then the broker becomes a participant in the fraud risking their profession and income as demonstrated in the "homeless person" loan in ACT
Business is business where your relationship is with a broker i believe it should be built on a professional value situaiton to best suit your investing business. As the finance broker model is not built on a fee for time like an accountant or solicitor a broker must provide advice and services in the same manner as other professionals however are only financially rewarded after a loan has been successfully funded. For this reason it is easy to have them compete for your services.
From a moral perspective does multi quoting apply to all the professions – Doctors, accountants, solicitors and brokers or do brokers stand out because there is no financial disincentive.
My opinion – Find a broker who fits your needs and develope a trusting relationship. Use cross quoting if you lack the trust and then discuss the results of your research to detirmine your choice to stay or move on.
Craig
I think you can speak to two or more brokers but the only thing I think is reasonable to expect is that you are open with them. Tell them that you are seeking other opinions. Most brokers will appreciate your honesty and they can then decide if they want to spend the time helping you.
As a broker myself, that's all I would expect.
Thank You so much for all your replies. Another question is, Is it wise to use a broker in your home town as apposed to one in a different state. I am looking at purchasing in other states now and wondered if there may be different products in othere states or are they all pretty much the same?
Thanks again
AnitaAnita
Many applications these days are lodged electronically so where you broker is located reallt makes no difference at all.
I have clients all over Australia and the world many of whom i have never spoken to or actually met.
With the electonic age and internet / email the world is certainly becoming a smaller place.The exception maybe if you are buying in WA where your broker needs to hold an appropriate Credit License.
Richard Taylor | Australia's leading private lender
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