Most people would be surprised at the difference a good mortgage broker can make when they negotiate for a property. They can make or break a deal. So knowing how to choose a mortgage broker is something you need to come to grips with at the start of your property buying process.
Let me give you some examples of the advantages that come from having a good mortgage broker on your side:
- Being able to pay a deposit by cheque is so much more flexible than having to use a deposit bond. And that flexibility can mean that you are ready to seal a deal faster and potentially avoid competing with other buyers. So a switched-on broker will have made appropriate arrangements ahead of time.
- Most banks require a valuation of the property at some point. And most seem to insist that all valuations are done after an offer has been accepted. But this can be a problem if the property is going to auction or if there are many buyers interested in the property and you need to make an offer AND exchange contracts quickly. Having to get a bank valuation before you can sign on the dotted line can slow the negotiation process down and opens the door for other buyers to compete with you. An experienced broker will be able to accurately advise you on your individual risks should the valuation not come in high enough. After all, he or she is privy to your loan to value ratio (LVR).
Do you know how to choose a mortgage broker who is commercial enough to understand that you really need unconditional approval before you make an offer? Can they properly advise you on the risks of proceeding without a valuation?
When property market is hot right, any delays caused by an inexperienced or non-commercial mortgage broker could cost you dearly – either resulting in you missing out on a property, or in you having to pay more for it. When money is hard to come by, as it is at the moment, a proactive broker will be able to make recommendations about which lenders are going to be most likely to view your application favourably.
Here are 5 questions to ask before you choose your mortgage broker:
- Do you work with both bank and non-bank lenders?
- Do I need a valuation before I can go to auction or sign an unconditional contract of sale and can you get access to valuations quickly and at no added cost?
- Are you aware that sometimes waiting for a valuation could result in me missing out on a property, and will you advise me of the risks of proceeding without one, given my individual financial circumstances?
- Will you give me advice on how to strategically structure my loan/s, taking into account my current needs as well as future needs?
- Can you arrange for me to have a cheque book for paying the deposit?
The answers to these questions will help give you clarity when you are wondering how to choose a mortgage broker. And if you’d like some recommendations of investment savvy brokers (we don’t get any financial incentive to do this – we just want you to make good decisions), shoot us an email and we’ll send you our shortlist.
DISCLAIMER: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.
Published: 20 February 2014
Updated: 18 April 2018