- A Finance Broker can be a one stop shop for all of your lending needs. There are Mortgage Brokers and there are Finance Brokers. A Finance Broker should be able to look after you if you are looking for a loan to buy a property, a loan to purchase a business or expand your business and a loan to buy a car, caravan or boat. A Mortgage Broker often focus on just residential or commercial mortgages.
- A good broker will do the legwork for you and give you a range of suitably priced options to suit your needs. With so many different lenders and credit providers to choose from, how do you know which one has the best deal or most suitable loan or package.
- Your broker will know which lender has the most generous calculators for your particular situation and is able to organise a proper pre-approval from a Lender. Do you fit the lenders credit policy? How is the everyday person supposed to know whether they are eligible for a particular bank loan. Maybe you earn good money but half of it is made up of commission payments and you’ve only been in your job 6 months. How do you maximise your borrowing capacity?
- A broker is paid to know bank security policies and post code restrictions. It’s not just about income and expenses. You may be buying a property that is over 2 Hectares, a serviced apartment or even just an apartment in a block of 30 apartments. You can’t just assume that because you used an online borrowing capacity calculator that the bank will accept the security you’re purchasing.
- A Broker is paid by the Lender. In most parts they will provide a free service to their customers. There are some Brokers that charge a fee for service and it usually accompanies small loan amounts, difficult and complex loan scenarios or commercial loans. The fee is always disclosed up front and you will need to sign to say you agree to be pay the fee so there should be no surprises.
- A Finance Broker will manage your loan from application through to settlement on your behalf. They will check the mortgage documents to make sure that the loan amounts and lenders fees are correct. They will liaise with the bank if there are any issues or questions the bank has about your loan application.
- A good Finance Broker will make sure that your loans are structured correctly for maximum flexibility to achieve all of your financial goals into the future. They’re not just a salesman focused on getting this deal over the line, they’re looking to understand your situation and long term plans.
- Should conduct a credit check prior to submitting any loan applications. A thorough Finance Broker should provide you with a copy of your credit file and credit score and be able to explain the meaning of your score. This is what the bank checks when you apply for a loan. By doing their own search prior to applying for finance they are reducing the chances of your loan being declined. There are many loans that have been declined due to an unpaid Telephone bill from 3 – 5 years ago that you weren’t even aware you had because you moved house and never received the bill. Alternatively the Lender may agree to lend to you however your original loan application was for 90% of the value of the property but they will only lend you 80% now due to the default. Wouldn’t it be important to know this before applying so that you don’t miss out on your dream property.
- A good broker should provide you with an outline of the steps involved in purchasing a new property and hold your hand throughout the process (metaphorically of course), especially if you’re a First Home Buyer. This is important as it’s often the biggest financial transaction you will ever make.
- An experienced broker will often have a back up plan. If for some reason the loan isn’t approved by one Lender due to something unforeseen or a recent change in credit policy that made you ineligible for a loan you’d previously been approved for then your broker will know where to go to get the deal over the line avoiding the potential loss of your property and your deposit in the processes.
Adriana Filipowski has a Masters in Professional Accounting, is a member of CPA and the MFAA.