Is A Mortgage Broker Necessary?

As far as using a Broker goes, there are no cons.
It doesn't cost any extra and if you choose the right broker, you won't just get the best bank/product for your current loan, but the right strategic deal that will make it easier when you're ready for your next loan.
 
Hi everyone, Im about to buy a $300k IP....

Should I see a mortgage broker?

Alternatively why couldnt I just use http://www.ratecity.com.au and find the best mortgage based on their descriptions?

What are the pros and cons of each option?

Best rate is rarely the best loan. There are other features you may or may not need. On top of this, each lender calcs how much they can lend you differently. Even then, everyones circumstances are different and there are some banks who won't go near certain stuff and some that don't mind it.

I think one of the brokers said it best on Somersoft the other day when he mentioned some brokers try to put square pegs in round holes. It'd be worse trying to do it for yourself unless very well researched.
 
When I was a high school teacher, out of the 70 teachers in the school there were a possible 20 teachers I would have been happy to have teach my children (2 out of 7). A teaching degree is 4 years, a mortgage broking course is 3 days..... I hope that answers your question.

Summmary: It does not matter where you go, but ensure they are good by seeking the help from up to 5 Mortgage Brokers. Remember this is the single largest financial decision of your life, Give it the attention it warrants.
 
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Hi everyone, Im about to buy a $300k IP....

Should I see a mortgage broker?

Alternatively why couldnt I just use http://www.ratecity.com.au and find the best mortgage based on their descriptions?

What are the pros and cons of each option?

I use a mortgage broker (from this forum) and I'm happy with that.

A mortgage broker does more than find the cheapest loan. They know about serviceability, docs required, possible delay / issues, etc. They can save you a lot of time and let you focus on other things.

Since the rate you pay for the loan is the same whether you use a mortgage broker or you go direct, why not use a mortgage broker?
 
A mortgage broker does more than find the cheapest loan. They know about serviceability, docs required, possible delay / issues, etc. They can save you a lot of time and let you focus on other things.

I've found MBs also act as a barrier between you and the Banker, such that only the pertinent questions get asked.....rather than the Banker going thru you like a pack of salts.

Despite being a Queenslander, Rolf Latham does a great job. :)
 
but ensure they are good by seeking the help from up to 5 Mortgage Brokers. Remember this is the single largest financial decision of your life, Give it the attention it warrants.
I believe this is bad advice. You don't want multiple hits on your CRAA (is that what it''s called?) as this can scare the banks off. You might interview several brokers, but only allow ONE to submit ANYTHING on your behalf. It is a very large financial decision, however if you plan on becoming an investor, is hardly the largest financial decision of your life.
Despite being a Queenslander, Rolf Latham does a great job. :)

I second Rolf, but I will also suggest that most of the long standing brokers on this forum know their stuff.
 
Thanks for the replies guys! Its great to have such fantastic support on here....

Yeah I see how a MB acts as a go-between the buyer and the banks, and they would save time. And yeah Ive got nothing to lose!
 
No disrespect to Rolf, who comes across as a very knowledgeable broker, but frankly I think most brokers are the "wrong" broker. And once you're with the wrong broker, you're stuck with them.

We have three loans with a broker at the moment. Our relationship with that broker broke down over his mismanagement of the third; our subsequent three went directly through the bank. Our personal banker looks after most things on the three brokered loans as a favour/goodwill thing, but he has limited visibility over them, so some things have to go to the broker. We are locked into that for the life of the loans. It is so bad that we have decided to refinance to get the broker out of the picture.

To make matters worse, (i) the broker decided to get out of the business and his service nosedived - no evening consults etc anymore, (ii) we moved so we now have to drive 80km to get to his office (whereas with our bank loans we can go to any branch if necessary), and (iii) when he did sell his practice, it went to a national company who now have all our private financial details that we would not have chosen to pass on. They also don't do evenings and are totally clueless about anything but the most basic PPOR lending.

Don't get me wrong - banks can suck too. But there are avenues if you need them. If one person handles it badly you can go to someone else, and they can see your information just fine. If a branch stuffs you around, there are complaint lines and media contacts and all sorts of people you can whinge to if necessary to get some pushthrough. The sheer size of the institution means you can work the system in a different way.

The only time I would ever use a broker again is if I had a specialist need such as a development and needed specific information about which players were friendly to that sort of lending. And even then, I'd ask here first.
 
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Hi DJ

In general u wont get an argument from me on what u are saying.

Couple of things to help others that may be in a similar situation.

Are all your loans ith the one lender ?

If the affected loans are with most banks, you can usually ask the lender to allow the branchie access to the info.

In my experience, I am not aware of any lender that will withold information to the branchie where the borrower has made it clear they want a direct relationship.

YOU, the borrower are the client after all and id be pretty crook if I as you.

CBA in some rare cases will push the broker for "permission".

But usually, if and when it happens, the LAST person to know that a branch person has topped up or restructured a loan is the broker.

ta
rolf
 
The only drawback to a GOOD broker, is when the best loan isn't in their portfolio. It does happen. We research certain lenders ourselves (those who don't go through brokers) and then go to the broker and see what they can come up with and how it compares. We try to be upfront with the broker about this, as a general curtesy for the time they put in which may not end with a commission for them.
 
frankly I think most brokers are the "wrong" broker.

This is why I said "brokers who are long standing members of the forum".

I went to two brokers that were totally useless and could not get finance for me for a purchase that was only around $60-70k. Not only were they useless, their customer service sucked big time too. I was totally pulling my hair out. In total frustration I contacted Rolf, and he was not only able to get finance for that small purchase, but also showed me how to restructure some of the existing stuff enabling me to purchase much, much more.:D

I recommend "long standing members of the forum" for a couple of reasons. Firstly, they have given back to the community via the forum and have learnt much along the way, just by contributing. Even if they joined the forum as a novice broker and have stood the test of time by being a regular here, you can bet they would now have a lot of knowledge. Most of the average (non forum) brokers will have clients that have a PPOR, and maybe a small percentage that also have an IP. The "long standing forum member brokers" will have many that not only have an IP, but also have complicated structures. Many of the experienced investors here will seek out a broker that can deal with their situation. Sure, there are good brokers outside of the forum too, but trying to find them could prove to be like finding a needle in a haystack.

I know Rolf has been named, but he is not the only one. There are (I think) around 7-8 here that, even though I have not used them, I could be pretty certain that you would get first class advice and service.
 
It does not matter where you go, but ensure they are good by seeking the help from up to 5 Mortgage Brokers. Remember this is the single largest financial decision of your life, Give it the attention it warrants.

I'll second this as being bad advice. Sorry. As already mentioned, putting in 5 applications (be they through a broker or a lender) will totally mess up your CRAA and it may make it almost impossible to get a loan.

Secondly, brokers are people too. You don't get the best service from someone who knows they've only got a 1 in 5 chance of actually being paid.

By all means talk to several brokers. Describe your situation and your goals and discuss various solutions, then commit to the broker who you're most comfortable with.

BTW ratecity only appears to list the lenders with the cheapest 'quoted' rates. Some lenders do have cheaper loan in some circumstances and some lenders may be more appropriate to your circumstances. You won't find this information on a website. The suggestion of doing your own research and asking for alternatives is an excellent one.
 
Mortgage broker

An experienced and ethical mortgage broker is an essential part of your investment team if you are serious about acquiring multiple IP's; our broker is absolutely fantastic and is successfully leveraging us into significant wealth
 
Hi everyone, Im about to buy a $300k IP....

Should I see a mortgage broker?

Alternatively why couldnt I just use http://www.ratecity.com.au and find the best mortgage based on their descriptions?

What are the pros and cons of each option?

Michael,
Notice you're in Toowoomba. I can recommend a broker in Surfers if you haven't already found one in your area. PM me for details if you're interested - I don't want to look like I'm plugging.
Cheers.
 
Rugrat as far as I am aware there is no lender who wont take business from a Broker or any other individual for that matter.

Whether the Broker gets paid for the deal is another matter and not of debate.

In fact in certain cases we have used lenders that arent on our panel and havent earnt a cent out of the transaction.

You dont have to use a dentist to remove your own teeth but i for one prefer it. It is horses for courses and not all Brokers are investment orientated or even own investment properties.

In fact if i was a property investor dealing with a Broker would like to think I wouldnt own more property than he / she and yet they were giving me advice.
 
When I was a high school teacher, out of the 70 teachers in the school there were a possible 20 teachers I would have been happy to have teach my children (2 out of 7). A teaching degree is 4 years, a mortgage broking course is 3 days..... I hope that answers your question.

Summmary: It does not matter where you go, but ensure they are good by seeking the help from up to 5 Mortgage Brokers. Remember this is the single largest financial decision of your life, Give it the attention it warrants.

Is it the same thought process when selecting a pub to drink at? Obtaining a RSA takes 3.5 hours. If so I'm happy to try 5 different bars and if needed 9and able to walk) a 6th or 7th.

Seriously, no matter what industry you deal with there will be the good, bad, experienced and in-experienced. My mother in-law recently had a pacemaker put in but prior was put on the wrong medication by the surgeon. This caused her greif for over a week & 2 more hospital visits (only to be sent home stating it was anxiety) before the problem was found.
By all means chat to a few and be honest with what you're doing. There are quite a few MB's who don't charge for their service and being given the run around for a week or 2 only to find the deal has gone to the recommended institution but via a different channel. Set out what you "need", then listen, answer the MB's questions honestly & then see if your "need" has changed. If recommendations meet your needs then proceed, if not look elsewhere :)
 
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