There is growing and sustained value in building a great working relationship with a mortgage broker, particularly for investors. Whilst there is an abundance of advice on the importance of due diligence when it comes to initially selecting the right mortgage broker, there is little commentary on how to best utilise their expertise once you have engaged their services. Whether you are purchasing a property for the first time or adding to your investment portfolio, there are some simple things you can do to get more out of your mortgage broker experience. We have done some homework for you by asking David McCleery from MCP Group for his top tips on how to capitalise on a good mortgage broker relationship.
- Be upfront with ALL your financial information. Debt is a fact of life. Borrowers tend to shy away from their liabilities for fear that it may influence loan approval. Instead, make this information transparent so the broker can consider the different options on how to improve the efficiency of your assets and liabilities. For example, the value of consolidating high-interest credit card and car loan debt is too often overlooked.
- Avoid thinking the relationship ends once the loan is approved. Circumstances change, for example, you might decide you would like to improve on the property 12-months down-the-track. It is likely that your mortgage broker will have a better understanding of the borrowing market conditions and will be able to negotiate a better deal compared to applying for it alone.
- Try not to be overawed by the banking industry. Money should be regarded simply as a commodity, like sugar, wheat or iron ore, that a variety of institutions trade in. Viewed in this context can help to remove some of the emotion in your decisions.
- There is rarely arbitrage in the market. A mortgage broker’s ability to deliver the lowest cost of funds will generally be better than a consumer alone because of their volume; however, this is often overrepresented by industry participants. In any event, those who focus heavily on cost alone, generally end up with poorly structured finances.
- While your broker is not an accountant or lawyer, pick one that understands the importance of asset protection and taxation strategies, and can communicate on these topics with other advisers.
- With growing complexity and regulation in the market, make sure the broker has the depth of experience and resources to overcome some of the inevitable hurdles that arise from time-to-time.
- Ensure the broker has experience with customers such as you. You may have a unique set of circumstances that some brokers will be across, while others may not.
- Share your vision and financial goals and make sure your broker is well engaged to help you get there. Brokers have a range of modelling tools, along with access to property data which can add value when making investment decisions.
- If you are looking for a long-term relationship, ask the broker about his future plans and seek assurances about his planned tenure in the industry.
- Lastly, be clear with your own expectations and communicate these upfront. As with any service provider, this will give a foundation for assessing the performance of your relationship over time.
We at RT Edgar wish you every success with your future plans, and remain committed to helping you achieve your property goals. Please contact us for assistance at any time, and in addition we can arrange contact with the brokers who assisted with this article, should you have specific queries in the mortgage space.