I have recently engaged with a Mortgage Broker from a big Mortgage Broking company. I am having him do one loan for myself, one for a JV and one for my girlfriend. I have a reasonable understanding of finance but thought a broker would be more helpful this time around.
This is the first time I have used a Mortgage Broker and only used one due to the complexity of 2 of the loans. Although he is very knowledgeable the proces is draaaaaaaaaging. For all my previous loans I have gone straight to the bank.
I thought by using a Broker would make the process easier but it seems this is not the case. Due to the lengthy time frame this has taken, I had my girlfriend go to one of the big four to have a loan as a redundancy as the finance clause is due to expire. The bank approved her within a week yet the broker is still going and we have had to get another finance extension today. (although she now has a loan through one of the big four she particularly wants the one the broker is going for).
In hindsight I wish I had of sent her straight to one but was unsure due to her deposit situation.I do understand that they are good for advice for info regarding different products but I may have been able to research all possible lenders in this time. I have almost reached a point where next time I may "use" a broker for an initial consult where they tell what product would suit for the particular situation then go straight to the bank myself.
Are brokers worth it for straight up and down loans?
Are you better off shopping around and researching if you have the time even if the loan is more complex?
Do banks put loans from brokers on the back burner and concerntrate on customers that come direct to them as they are not paying comissions?
Why is so much more paperwork required with Brokers?
This is not a beat down of brokers im merely just after some adviceIm just at a loss for words as to why it is taking so long.
Hi Fredo, I think you have answered your query yourself in the fact that you are refinancing a complex loan. I'm also refinancing at present and have used a MB for years and will continue to do so.
Things have clearly changed and the time frames have extended significantly so dont be too hard on your MB.
The level of scrutiny this time around is much more than anything I have experienced before. We have a stable employment history, multiple properties, low LVR, no other debt, wear cardigans, watch ABC. Tick all the boxes!
Its always difficult if your in a hurry. It will happen…Hi Fredo,
Your post seems like dejavu, as i recently had the exact same experience, only I had purchased the property at auction and paid 5%dep (ouch). After 4 weeks of dealing with a broker and not really getting anywhere, I approached another broker who recommended I “GO STRAIGHT TO THE BANK !! as this will be quicker”.I usually go direct to the bank but assumed with the brokers large range of contacts it would be quicker…. WRONG.
Lalibella wrote:Hi Fredo, I think you have answered your query yourself in the fact that you are refinancing a complex loan. I'm also refinancing at present and have used a MB for years and will continue to do so.
Things have clearly changed and the time frames have extended significantly so dont be too hard on your MB.
The level of scrutiny this time around is much more than anything I have experienced before. We have a stable employment history, multiple properties, low LVR, no other debt, wear cardigans, watch ABC. Tick all the boxes!
Its always difficult if your in a hurry. It will happen…Thanks for the reply. Although the loan is somewhat complex the time frame still appears to be extreme. I just feel I could have
visited the banks myself by now. I will stick it out this time and weigh it up next time before using a broker.Hi fredo
Well i guess i have to disagree but then i would wouldnt I.
I decent broker isnt just a form filler and a pusher of paperwork he / she is someone that has a thorough understanding of what your requirements are knows where to go and achieve this and works with you through the deal.
In addition, he / she knows how to structure a loan correctly which most Bank managers have No idea and why should they as cross collateralising securities benefits the lender anyway. Half the job is getting a clients deal set at an appropriate product at the right (not necesarily cheapest) rate and with a lender that can process efficient not only its new clients but also it post clients when it comes to customer service.
Whilst the odd lender used to have a different turnaround time for the Broker V Branch network most have streamlined this and the loan ends up in the same credit assessment queue. Admitedly i have seen the odd deal where the local Branch manager has fudged the figures to get a deal through their system which a Broker is unable to do but in most cases i would say the deal done through a component Broker will have just more chance of long term success for the client than dealing directly with the Bank.
Lastly interesting to note that most of the Banks have pulled their direct online channels such as Anz with One Direct and CBA with Homepath so any client merely chasing the lowest interest rate quoted at the time of application will find these avenues not open to them anymore.
Richard Taylor | Australia's leading private lender
I must say that I agree fully with Richard.
What most people do not realise is if they have multiple properties, the broker will arrange the finance so as to not securitize properties to make it easier for future investing or refinancing.
I have seen the mess that some banks have created unbeknown to some property owners. They may put in an application in for refinancing or restructuring etc and discover that a property or two has security over it and have been completely unaware of it.
The banks dont care what they use as security or how it is structured because they are only thinking of there own security, not the clients. Banks get paid a weekly wage. They dont care about you.
Building a relationship with a broker will save you a lot of stress in the long run especially if you intend on investing in the future. A broker can also assist you with how to structure a loan to assist you with your future plans. Does a bank do that?
A good broker relies on repeat business and referrals, and will therefore look after your interests right from the beginning.
I do believe that the banks make it difficult with the broker channel. They say that is not the case but we all know it is.
If you are doing a one off loan and never plan to get finance again, then go to the bank. They dont care, you wont care and they are quicker.
If you want to consider setting yourself up for you future financial security in property and retire in comfort. Make the effort to be patient with a broker you trust and you would be happy to create a long term relationship with. It is not their fault the banks discriminate.Maybe the problem is that you went to a broker from a big mortgage company – an employee doing a job?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for your replies. I believed the above may have been the case but it has now confirmed. I will just have to ride it out this time
and re-assess for next. It was the time frame that the lonas were taking that was the concern frustrating.I will give the scenario.
My girlfriend had no deposit but has bought a brand new property in Ballarat for 207K and by using the FHOG, Boost and Rural
bonus plus a few thousand of her own funds can get the LVR under 85%. The contract was signed (21 day finance clause) and
handed over to the broker 29 Sep, valuation conducted on 12 Oct and as at yesterday we were still waiting for an approval.
I contacted the broker yesterday and he stated the approval would be at least another 3 days away. NAB Homeside is the lender.
My GF has a 70K a year job 6 years at the company and a 10K pers loan with NAB.After having numerous people tell me that brokers take to long including our solicitor I decided why not have a redundancy plan and
so when we visited a home show earlier in the month we decided just to ask CBA if they lended to 85% LVR no savings history.
CBA said no dramas and had unconditional approval within a week.I should have conducted more research for this loan but I did not think that a bank would look at her and a no
My GF would prefer to go with NAB as all her other banking needs are already set up there. So you can see my frustration.
I do think that I need to stick to a broker for the JV and my Portfolio. Maybe I have gone wrong with a big company.
As I would assume they would take almost anybody on where as smaller firms would take more experienced brokers on board?
Do small broking companies work commission based as well?Richard you mention you have interstate clients. Do you have any offices in Melbourne or is it all through your Brisbane office?
fredo
There is a big difference between the processing speeds of Homside and NAB although funded from roughly the same arm.
Sounds like your Broker wanted the extra Homeside trail commission.No office outside sunny Brisbane however in saying that typing this from the UK it is not so sunny.
Hate to say folks if you deal with me you get me and no one else.
Richard Taylor | Australia's leading private lender
In my little knowledge I would like to suggest you to got to the bank. If you can manage them properly then you can fix your problem easily.
Thanks Richard. I don't think that is a bad thing dealing with you only from the massive amount of knowledge you have.
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