Six ways you can benefit from a mortgage broker
When looking to borrow money to buy a property, many people don’t realise the benefits that working with a professional and experienced adviser can offer – including helping them get the best overall mortgage deal.
Using a mortgage adviser could save you tens, or even hundreds of thousands of dollars over the lifetime of your mortgage. Here are the top six advantages of using a mortgage broker (adviser):
The property market, relevant regulations, and lending environment are all constantly changing. This means up-to-date subject matter knowledge can make a massive difference to your circumstances. For example, while home deposit rates change frequently, and often the headline requirement may say something like “property investors need a 40% deposit” - there are ways for property investors with a 20% deposit to still invest.
Mortgage advisers can help by:
In the event your assessment indicates you aren’t yet able to purchase a property, a mortgage adviser will usually be able to tell you this before you send in an application that may get rejected and damage your credit score or at least waste your time. They will also be able to tell you how you could work to improve your situation and give you an idea of when you may be in a better position to purchase a property.
Terminology can also change regularly, so it pays to have someone on your side who can assist you in working through the jargon used by the banks and real estate agents. This ensures you have a clear understanding of each step along the way, and helps you avoid common mortgage traps.
Bankers work for the bank.
Real estate agents work for the seller.
Our mortgage brokers work for you – the home buyer.
Better still, the team at Become Wealth might be a little different from other mortgage advisers: they are qualified, ready, and willing to give advice on investments such as KiwiSaver or other financial matters too. This means they’ll be thinking about your mortgage through a lens of wealth creation and sustainment.
If you were to apply for a mortgage without a mortgage broker, to shop around, you must send in a series of applications to individual banks. A mortgage adviser will do this for you, meaning you just need to send one application, and they will compile specific information to send to each bank. In fact, they might not even need to as they are working with the banks and lenders daily, so they may be able to evaluate your application and recommend only submitting it to the bank or lender who is likely to give you the best overall deal at that exact time.
From here, they will liaise with the bank or banks, so you don’t have to spend a lot of time going back and forth with them yourself.
Because mortgage advisers deal with a variety of different banks every day, they have more power to negotiate than you do. They might have access to more competitive interest rates, and know which banks are currently offering the best deals – which often varies by situation as the lender’s policies change so often. For instance, one may enact policies which favour first home buyers for a period, while another favours property investors.
What’s often overlooked – and is probably more important than interest rates – is that a good mortgage broker can assist you to choose a great loan structure for your personal situation, which might usually mean setting it up to be repaid as quickly as possible. This can save you from paying a lot of mortgage interest over the long run, and depending on your situation, they may be able to reduce or fully waive some of the initial fees that banks usually pass on to customers (such as application fees).
In many cases they can also obtain great benefits for you, such as a mortgage cash back.
Remarkably, this is all usually free to you, as Become Wealth will be paid by the lender by a sum which is already included in the lenders own profit margin, whether you use a mortgage broker or not. We'll also transparently inform you about it in writing, so you know we're working in your best interests.
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Most people looking to purchase property are probably already stressed enough with all the things that need to be done before their mortgage settles, but a mortgage adviser will do a lot of the work for you – letting you focus on more important matters.
Mortgage advisers are there to help you through the process every step of the way, including recommending other professionals as and when you need them. This might include lawyers, accountants, building inspectors, and so on.
Better yet, with our online application portal a mortgage application can be completed from the comfort of your own home in as little as 20 minutes!
Once upon a time, heading straight to a bank was the go-to solution for anyone who wanted a mortgage.
Over recent years, tighter regulations and stricter testing of applications by banks has led to many people accessing non-bank lenders, often called ‘second tier’ lenders. This includes lenders who are in the business of providing finance but aren’t the traditional registered banks like ASB, BNZ, ANZ, Westpac, KiwiBank, TSB, and so on.
Non-bank lenders include building societies and credit unions. Both banks and non-bank lenders will lend you money to purchase a residential property. That could be for you to live in yourself or as an investment.
The usual key benefit of non-bank lenders is they are not subject to the same strict criteria that mainstream banks are, so they can lend to those who might fall outside of the main bank’s lending criteria for reasons such as:
The main drawback of second tier lenders is usually paying a higher interest rate. Basically, you must pay slightly more in interest for being a slightly higher risk to the (second tier) lender.
One tactic to handle this is obtaining lending with a second-tier lender and staying with them for a couple of years – as usually just getting on the property ladder is the most challenging step. After those couple of years have passed, there are probably several reasons why the borrower can now meet the criteria of mainstream banks – such as by increased income, better credit score, a longer track record of self-employment, and so on – so shifting the lending to a main bank by refinancing can make sense to access slightly lower interest rates.
Learn more: Could a tier two lender help you get on the property ladder?
A mortgage adviser can save you time, stress, and money – and you won’t usually need to pay a cent for their services.
If you’d like to purchase your home, purchase an investment property or restructure your existing loan to be mortgage-free faster, simply get in touch and we will be back to you within a working day.