Stuart Wills Explains Good Reasons Why To Use A Mortgage Broker
There are plenty of good reasons to use a mortgage broker and it is easy to say you should choose a mortgage broker instead of the bank, but let me explain five reasons why to use a mortgage broker;
- A better chance of getting your loan approved
- Making sure that you have the correct loan structures
- To ensure that you get the best interest rates
- Get advice on how to pay your loan off faster
- Help when you need it
For first home buyers, those people who already have a home (therefore already have a home loan) and those people that want finance to build a new home these are some very good reasons why to use a mortgage broker.
Get Your Home Loan Approved
To many this is the most important thing – and it really is.
Nothing else can happen until you have your home loan approved and this is a really good reason why to use a mortgage broker, especially today with the new rules that have been imposed on the banks.
This week I had a call from Paul which is a very good example of why to use a mortgage broker;
Paul has banked with Westpac all his life and in April had approached the bank for a mortgage pre-approval so he could buy his first home. Paul is on a very good income and has over $150,000 saved and has no other debt, so everything looked good and Westpac provided him with a pre-approval for finance of $800,000 meaning he could purchase a house for $950,000. He has now found a house to purchase and spoke to Westpac about what he needed to do and Westpac advised him that the loan offer had now expired, but that they could no longer offer that level of finance and he needed a 20% deposit. Based on his $150,000 deposit he could only purchase to a maximum of $750,000.
Paul was shattered – he had finally found a house that suited and thought he was all okay with the finance too.
He spoke to someone who told him not to give up and to speak to a mortgage broker, so he phoned me and came straight in to see me. We discussed his situation and got everything we needed from him to submit a new application. Of course we knew that Westpac were currently unable to do any lending where there was less than 20% deposit or equity, but we also have other choices. I phoned around and spoke to some banks before confirming that two banks were in a position to provide Paul the finance he required.
The loan was approved within 48-hours and Paul is now able to move ahead with the purchase of his new home.
Paul could have given up, but someone suggested that he spoke to a mortgage broker and now Paul is going to be a home owner.
With the loan now approved we will discuss the loan structures, source the best interest rates and set things up so Paul can pay his home loan off faster.
First Get The Loan Structure Right
Most people tend to focus on the interest rates that the banks offer and think that a lower home loan interest rate equates to a better loan when the fact is that getting the correct loan structure is the most important factor and will generally make the biggest difference to the actual interest paid over the term of the loan.
Banks have a range of different types of home loans and while they might seem to select the best home loan we know they will not tell you to go to another bank if they knew that what they could offer was not going to be the best home loan for you.
As mortgage brokers we help you find and manage a home loan that suits you and your individual situation and needs both to ensure that you get the best home loan now and that changes are made as required during the time that you have the home loan.
Here at The Mortgage Supply Company we can assist you in making a well informed decision about something that will affect you and your finances for a good number of years.
What About Interest Rates?
Of course getting competitive home loan interest rates is very important too.
A low home loan interest rate can make a big difference to your repayments and more importantly it makes a difference to how long it will take to pay off your loan.
Remember it is not just about getting the lowest interest rate now – it is about getting competitive interest rates throughout the term of your loans.
Advice On How To Pay Your Home Loan Off Faster
The normal new home loan is approved and set up with repayments over a 30-year term.
Over 30-years you will pay the bank a lot of interest, but you will also be tied into mortgage repayments which mean you are not able to do other things with your money.
Of course the banks are quite happy if it take you 30-years to pay your home loan off and they will even provide additional finance and credit cards too. Banks primary role is to make money for their shareholders – they are not focused on helping you get rid of debt.
On the other hand, a good mortgage broker will show you how to get your mortgage paid off faster.
Five Reasons Why To Use A Mortgage Broker
A good mortgage broker has access to a number of banks plus non-bank lenders. This means that a broker has the ability to source the best home loans and ensure that the lender offers you the most appropriate loan structure and the best mortgage interest rates.
Anyone can use a mortgage calculator, but your broker or adviser will also explain the various loan options to you and step you through what needs to be done to get the best from any home loan and ultimately pay your home loan off faster.
We hope that these five reasons have helped explain why to use a mortgage broker and we hope to hear from you soon.