Some of our major banks have increased their interest rates for investors.
Well the APRA (Australian Prudential Regulation Authority), which is the body that regulates how the banks behave, are worried that property investors are being too risky and have asked the banks to be harder on investors.
In response the banks have:
– Reduced the LVRs (Loan to Value Ratios) available to investors. Some won’t lend over 80%.
– Increased interest rates for property investments
– Introduced tougher servicing for property investors
Resulting in it being harder to get an investment loan than a home loan.
This show why it is more important now than ever to see a mortgage broker than go directly to a bank.
There are a number of reasons to use a mortgage broker over going straight to a bank, here are our top ones…
A professional mortgage broker is independent of the banks and financial institutions. Not all banks offer the same products and as finance isn’t a one-size-fits all situation, an independent broker will have access to over 40 financial institutions, and therefore are able to find the right product to suit your needs.
In most instances a professional mortgage broker will have their own fully accredited business with years of financial experience. A professional mortgage broker is an expert in their field and would be abreast of the changes in their industry and are committed to their clients for the long term. For example, one our brokers is now working with the third generation of clients, meaning he initially helped the parents, then their children and now their children’s children with all their financial needs. Whereas with banks; they have employees who move around department and branches, and are internally promoted to areas away from customers.
You may need specialised financing for a personalised situation. It may be for an investment loan, or funding business equipment. Finance is complicated and vast, therefore many brokers become experts in a specific area. It pays to talk to a broker who specialises in the area of your need. While at the banks you may get whoever is available to see you, and they may not have the experience in the area you require.
- Follow Up
A good mortgage broker will become a friend for life, and this is definitely so if they have the systems in place to follow up on your application, keep you informed and save you time and money.
In most cases a professional broker will have their own business and therefore their passion and desire to meet their client’s needs will be stronger than a bank employee. A professional broker will do whatever they need to do to ensure your finance goes through as smoothly as possible.
- Long Term Relationships
Your mortgage broker will become your personal banker. With the right mortgage broker you will develop a long term relationship. Your mortgage broker will spend the time with you to understand your financial goals and ensure you are informed in changes in finance that could affect your structure. They will be proactive in ensuring you have regular reviews on your loans and financial situation to ensure you are getting the best deal from your financial institutions. They understand the importance of long term client relationships and therefore will be there for you from your first mortgage through to your retirement planning and beyond.
With the banks you may have an affiliation with a company or a branch, but unfortunately your personal banker at that branch may move to another position and you are left with frustration of having to explain all your financial goals and structures over and over again.
Remember, there is no out of pocket expenses to see a professional mortgage broker, as they receive their income from the loan products through the financial institutions.