Hi Everyone,
I applied for a loan with my bank, and they’ve pre-approved and whatnot, I applied with the bank as I thought that was just easier, however I’ve heard that a mortgage broker is the better way to go as you can get better deals and have questions answered better than by someone directly from the bank. Can anyone shed some light on this for me, maybe dish out some pro’s and con’s?
Thanks,
Lora
I guess Lora it all depends on what you are after.
If you are Mr & Mrs Joe Average and want to buy a PPOR and have a 50% lvr then i guess you can walk into most Banks and they will probably assist you all things given.
If however you want a bit more such as a choice of lenders, a correctly structured loan, have been knocked back by 1 Bank, an investor or looking to buy your first or 31st IP then a good independant mortgage broker can add value to your portfolio in more ways than 1.
It always makes me laugh when people say they walked into their Bank and they helped them.
Well honestly did you expect them to tell you there is a better deal down the road or personally i wouldnt structure the loan that way but are told to push this as it protects us not you.Most Bank Johnnys dont even own their own PPOR let alone 5 IP's and yet they are offering you advice.
I guess everyone to their own but when over 40% of loans processed these days are done though third party introduction it tells you something.
There is no cost to you the borrower and in many cases we negotiate a better deal that the branch / bank offer you direct.
Now as for disadvantages i cant think of too many but i am sure someone will have one.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Well stated Richard. If you reduce the role of the broker to simply processing a loan you are no better or worse off than doing things yourself. If you want a comparison of products it is easier to use a broker and won't cost you anything. If you want advice on how to structure your loans effectively and what types of property and startegies are most appropriate to you from a financing point of view, then you not only need to use a broker, you need to use one who has specific expertise and experience in property investing and the various niche areas that fit withing it, such as vendor finace, development, commercial property SMSF lending etc.
Hi Lora
I've always used a Broker and always will. It just makes sense to me that a bank will try to minimise their risk by tying you up with things like cross collateralisation that will greatly reduce your flexibility as your portfolio grows.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Richard has it all covered, and a good broker will also be there to answer any queries along the life of your loan and will proactively ensure that you are being looked after, whether it means restructuring when required or even changing banks for a more attractive package (and no, not always about what's cheapest!).
The number of people I meet who have had their loan for a number of years who had no idea they were being ripped off either through terrible rates or poor service as they simply "didn't know" still amazes me.
Many bank employees are there to sell a product, we are here to help you find solutions.
Then again, it will come down to the individual broker, and there are some very poor ones out there. A negative (although it's more about our system itself) would be that it's a little too easy for someone to become a mortgage broker, so you can find brokers who are only in it for themselves and with little experience or very poor knowledge…
Sold,
Next question, any recommendations for a mortgage broker?
Lora4486 wrote:Sold, Next question, any recommendations for a mortgage broker?Richard Taylor
Thanks Ben very kind of you.
By the way got your email from earlier and I am onto it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
One thing i would say is that i signed up to a house and land package builder and they suggested a mortgage loan company and a settlement company that they use and there was some slight discount etc… Then when i had some questions about whether i might need to pull out of the loan and sent them to the loan guy i got a call back from the land package rep… So i think in future i would go with an independent mortgage broker that I was sure was on my side and would keep conversations confidential….
The other thing is that although the bank might pay any commission on the loan product rather than the borrower, are there any banks or institutions that pay more or offer other inducements that might incline mortgage brokers towards that companies product because its better for them??? or if they send more business to a certain bank/CU they get some benefit out of it??? Sort of like stock brokers that might suggest shares to you because their company maybe wants to flog them off or they get a better commmission???
The commissions paid by lenders don't vary a great deal – you should ask your broker to show you a schedule of the commissions payable by each lender on his/her panel.
I'm sure the brokers on this forum focus on doing the best thing by their clients which generally results in positive word of mouth – rather than placing them with a cr*p lender because they get a few extra dollars out of the deal.
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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