Mortgage brokers can help you to build your wealth and identify cost savings. The value-adding benefits of obtaining advice have a compounding effect over a long period of time, which is why it is important to reach out to a mortgage broker with each life-changing event.
Here are our top 10 most common moments when people reach out to mortgage brokers:
- They want to buy a property
The single most common reason people contact us is when they expect to buy a property. Many times, we are approached when people have found a property and are keen to put in an offer. Unfortunately, this can be too late and they find that they have an insufficient deposit, or perhaps they were self-employed and were not operating with their ABN for long enough.
Ideally, you should contact a mortgage broker before you have even started looking at potential properties and suburbs. An initial assessment with your mortgage broker tells you how much you can afford to borrow, whether you have a sufficient deposit, whether you should wait a bit longer to save up a larger deposit, or whether you may need to consider alternative funding structures in order to secure a property. More importantly, it ensures you can be confident with your finances and that you understand what your financial limits are.
- They’re unhappy with their current lender
Banks tend to focus on gaining market share, which means they invest in campaigns to win over new customers. This often comes at the cost of neglecting their existing, loyal customers. Dissatisfaction with current service, such as slow response times, limited bank opening times, long waiting times with their call centres and poor (or no) communication regarding better lending products, can be catalysts for people leaving their current lender. Furthermore, those who do not monitor their interest rates actively are at risk of being left to pay higher interest.
- Interest rates have changed
A change in interest rates by the RBA is not always fully passed on by lenders to customers. Different lenders pass on rate cuts (or rate increases) to a varying extent. It is worthwhile investigating whether you can benefit from rate reductions (or if you can avoid being charged a higher interest rate). Mortgage brokers keep up-to-date on products across 20 to 30 lenders, and can therefore identify a competitive interest rate to suit your needs.
- Separation or divorce
Facing a break-up is emotionally stressful, and deciding what to do with your existing home and mortgage is not always a straight-forward task. With the right structures, you may not have to sell all your assets and start again. Sometimes, refinancing and consolidating your debts may be your best option, and speaking to a mortgage broker can reveal alternative solutions.
- Debt consolidation
If you have multiple loans, you may find it easier to manage if you roll all your debts into one (i.e. debt consolidation). Mortgage rates are also the lowest type of debt you can have. A mortgage broker can sit down with you and help you decide whether this is a beneficial step to take.
- Complex financial situation or credit impairment issues
Are you a business owner? Are your tax returns out of date? Is your credit impaired? These are just a few examples of tricky financial situations that a broker can guide you through to provide options outside of the traditional banks.
- Downsizing or upgrading your home
A change in family circumstances can lead to a decision to downsize or upgrade your existing home. A mortgage broker can help you decide whether to sell your existing home first, or wait until you have found a new property and take out bridging finance in the meantime.
- Additional funding requirements
If you require additional funding for personal reasons (such as a car or a holiday) or for investment purposes, a mortgage broker can review your finances to identify areas from which you may be able to extract some money.
- Restructuring needs
The expiration of a fixed rate or interest only period can be a catalyst for you to restructure your portfolio.
- Advanced property investment strategy
Investing in property using trust structures, including Self Managed Super Funds (SMSFs), can be complicated. A mortgage broker can advise you on an appropriate loan structure, as well as guide you through the additional procedural steps and paperwork.
