Why Should You Work With A Mortgage Broker For Your Home Loan?
It is common in NZ for people to arrange a mortgage via a bank. In fact around four out of five mortgages are arranged directly with a bank. In most other westernised countries the proportion of mortgages direct from a bank is only about ten percent. In those countries the vast majority of people work with a mortgage broker to arrange their house purchase finance.
Few people understand mortgages
People tend to only buy a handful of houses during their lifetime, and as a result, are not very familiar with the workings of the mortgage market. So they are often quite naïve when it comes to discussing or negotiating a mortgage.
A mortgage broker has lots of experience and so they understand what is happening in the market and how to use that knowledge to help borrowers gain better mortgage rates and deals.
The range of mortgage lenders
In NZ when people think of mortgage lenders their first tout is one of the main banks. However there are many other lenders that might be able to help them with financing their house purchase.
For example, there are building societies, regional banks, credit unions, mezzanine lenders and even private individuals. Few house buyers even know of these sources let alone are aware of the mortgages that they might have on offer. However a broker will be aware of these and can talk through the lending options with their clients.
Mortgage Brokers Are Paid On Settlement
A mortgage broker will lonely get paid once you have the financing in place unlike a bank mortgage officer who is paid a salary. This means the broker has to do a great job to firstly get your deal over the line and secondly to get good references and referrals for more business. So you can be sure they will be working hard to get you the best mortgage possible.
People Don’t Like To Negotiate
Let’s face it; negotiating is not a skill that many people have. And when it comes to dealing with a bank, people often feel intimidated and don’t want to upset their potential lender.
However, a mortgage broker spends a good portion of their working life in negotiations with e lenders. They know how to talk to them and how to structure a proposal so it has more chance of being accepted. Further, they also know how much a bank wants to get a mortgage especially if it stops one of their competitors from getting a mortgage. So the mortgage broker will be able to apply suitable pressure to negotiate a better deal for you.
Mortgage Brokers Know Current Offers
The range of mortgage products on offer changes with amazing frequency. The average person in the street would not be aware of all of the mortgage products they could consider but a broker has to keep on top of this data.
So a broker might find that a lower rate has become available since you last spoke to the bank directly. This will save you money and interest payments.
Speed Is Of The Essence
Due to the rapid change on mortgage offers, deals are often withdrawn. Your broker can help the process along. This can include the paperwork process and then perhaps even asking for a particular deal to be held over while you finalise the purchase of your house.
Mortgage Brokers Do Not Charge You For Their Service
Mortgage brokers are commission-based sales people. Their remuneration comes directly from the lender once the deal has been settled. The borrower rarely has to pay for any brokerage services in the mortgage industry. Make sure you do not pay any fees directly to your mortgage broker.
Only One Credit Inquiry
If you approach a number of banks they will each carry out their own credit checks. For many credit reference agencies, more frequent checks can count negatively in your credit report. It can be seen that you are not a viable lending option and are shopping around as you have been rejected by a possible lender.
However, if you go via a mortgage broker, they will run their own credit check which they will then supply to each potential lender. This not only saves time but also protects your credit rating.
Mortgage Brokers For North Shore Home Buyers
Banks are much more restrictive on their lending these days especially with the increased LTV ratio that was imposed at the end of 2013. Therefore it can make it a lot easier for borrowers to work with a mortgage broker to negotiate improved terms.
If you want mortgages on the North Shore, you can look at this broker, this website http://northshoremortgagebroker.co.nz/can help.