You’ve found the perfect house. Or maybe you’re wanting to purchase an investment property, but you’re not sure how to go about it. You know that you’ll need to get a loan. How hard can it be?
When you’re buying a property, you’re playing with big numbers. That can be scary. It’s not just your money getting swept up in the process; it’s your emotions, too.
A mortgage broker is someone who will help you not to let your emotions cloud your vision of your goal. They want to see you get your home just as much as you do, but they’re also able to step back from the emotions of the process and do what needs to get done.
And that’s what you need – because there’s a lot at stake.
A mortgage broker will help you find a good home-loan. They’ll find you a lender with competitive rates and good features. But that’s not all they’ll do. They’ll walk you through from the moment you first step into their office, to the day when you get the keys for your home. Then, once you have the home, they’ll still be on hand to give you any guidance for the duration of your loan.
Why Do I Need a Mortgage Broker?
We hear you thinking, Can’t I just get advice from someone at my local bank free of charge?
And the answer is yes. You can. But the person at your bank can only talk to you about their products. They can’t tell you about other lenders and loans available to you; they’re only going to show you what their own branch offers.
The employee at your local bank is generally there to give instructions, not advice. And let’s face it; advice is what you’ll need. Whilst you may get lucky and end up with a great loans officer in the branches, many of them won’t have the experience or time to really explain all the answers to your questions, like: How do I pick a builder? What are the steps around buying an investment property? When should I go and talk to an accountant about tax deductibility?
A good mortgage broker won’t just tell you about loans available to you. They’ll help you understand your needs, pick up on any potential issues that may arise, and help you all the way through to make your plans a reality.
The First Meeting
You’re a little nervous when you first arrive at the mortgage broker’s office. You need a home loan… But what you really want is the home. The loan is just getting in your way.
Maybe you’ve already found your dream home, or maybe you’re coming in with a general idea of the type of property you’re interested in… Either way, you need advice.
You walk in, you lay it all out on the table. “What do I do now?” you ask.
This first meeting is essentially an ‘information gathering’ mission. The mortgage broker’s job is to understand what you’re trying to achieve, work out whether you are ready to jump in now and then match a lender to that. But before talking about lenders, they need to gather all the information from you that a bank will need. A mortgage broker can speed up the process by asking the right questions and getting their initial homework right. A major change to the industry happening this year is that Mortgage Brokers will have to follow “Best Interests Duty” which means that legally they have to put the client first. Interestingly, the banks don’t have to comply with this new rule which will benefit those clients using a Mortgage Broker even more.
Are You Ready?
You may not be in quite the right position to take the next step, and that’s okay. It’s a mortgage broker’s job to help get you ready.
It could be that your savings aren’t quite yet where they should be, or it could be that your income is a bit questionable or you’ve been self-employed and the banks need more time to assess your situation. If you’re not yet ready, a mortgage broker is there to equip you with the knowledge and advice on how to improve your position for a loan.
If you are ready to get a loan, a mortgage broker’s job is to find you a lender, put everything together, and submit the loan application on your behalf.
Mortgage brokers are storytellers. Their job is to paint you in the light that gives you the greatest chance of being approved for a loan.
They’re experts at communicating the ‘why’ to the lender. They answer the question: ‘Why should we approve this loan?’
After the Loan Approval
So. The lender has approved your loan. You’ve entered into negotiations on a property you want to purchase, and you’re ready to exchange contracts with the agent.
Usually, at this point, a conveyancer or solicitor will step in and take over as the ‘project manager’. They’ll liaise with the other side, get the banks organised, and make sure you reach the settlement date with everything prepared.
Your mortgage broker will still be on hand to answer your questions, help you with the loan documents, communicate with the other parties, and follow things along.
And, once you get the keys… You’ve done it. The house is yours.
Written in collaboration with Madeleine McDonald