Thinking of buying that dream home? Not sure which bank to approach? Considering the idea of seeking professional help from a home loan broker?
Getting a home is no small feat. It’s something many of us do only a few times in our lives. Maybe even once if you plan on building your dream house with the help of esteemed home builders scottsdale az or wherever you live. So it makes sense that we don’t want to spare any expense.
Therefore, a good home loan is almost always a foregone conclusion. So, before you decide to either go it alone or call the first home loan broker you find on Google, here are some things you should consider.
A home loan broker, also called a mortgage broker, is a layer between you, the borrower, and the bank, the lender.
The strengthening property markets and low-interest rates may seem to indicate that all is well again on the lending front.
However, there are a number of factors that decide whether you get a home loan or not. A clear understanding of your borrowing capacity is crucial. An analysis of your current living expenses is important, too.
A clear idea of the lenders to approach is key. While your comfort level with your current lender may result in them being the only alternative, there is a possibility of rejection.
A home loan broker will be able to guide you, right from the search stage to settlement. Here are some reasons why seeking the help of a professional home loan broker could be beneficial.
Home loan brokers often have a set of lenders that they frequently work with. This gives them the ability to do match-making between you and the lender, based on your borrowing capacity, the value of the property you’re looking for, the existing portfolios of the various lenders and so on.
They Analyse Your Borrowing Capacity
A qualified, professional home loan broker will take a consultative approach to finding a suitable lender for you. This would involve detailed interactions to understand your motivations and requirements, financial position and current living expenses. Based on these inputs, the home loan broker can then present a detailed buying strategy for you.
If you’re considering the purchase of a property the next financial year, a prudent home loan broker will also be able to make suggestions around a budget for your expenses!
They Negotiate on Your Behalf
With the first signs of a recovery in the property market, banks are now joining the party. Several lenders are offering exciting package features and deals.
A home loan broker is able to take a ‘big picture’ view of deals across lenders and then suggest options based on your requirements. Even better, they’re able to negotiate for you.
When you go it alone, it’s difficult to get a consolidated view on the various deals and interest rate discounts being offered by lenders. Because the broker already has a relationship with the lenders, it becomes easier for them to engage in conversations.
They Offload the Drudgery
Applying for a home loan can often be a harrowing task, because of all the paperwork and approvals that are involved. An experienced home loan broker will be able to assist you with the required paperwork, right from the application stage to follow-on negotiations and associated adjustments. They will also be able to get the required approvals in place.
They Coordinate Settlement
You’ve found an incredible deal. The paperwork is ready. The required approvals are in place. But you know you can breathe easy only when you see the money!
Settlement can often be a laborious task, involving transactions between multiple stakeholders. A home loan broker will be able to handle this for you, right until you receive your payment from the lender.
They Provide Continued Support
A good home loan broker understands that customer engagement does not stop with the settlement.
With an annual review of your home loan, the broker will be able to advise you on whether you are still getting a competitive interest rate. They can then help you renegotiate your interest rate with the lender. They will also be able to explain the features of your home loan and answer any questions about your repayment schedule.
With the clouds above the property market clearing, it might often seem like bank loans are easy to come by. While that may be the case, data indicates that 60% of all mortgages are now originated by brokers.
Notwithstanding the benefits of having a home loan broker, the process involving taking substantial loans may come with big risks dependent on the market climate. Should economic difficulties arise later, you might find it difficult to repay the loan and keep up to speed, which could be detrimental to your financial health and future prospects as well. Given the conundrum you might face in light of such risks and expenses, you might find solace in approaching professionals for Independent Legal Advice before making a decision. In doing so, you might be able to make a decision with a clearer head.
While heading out on your own might seem like the easier thing to do, there are certain advantages to working with a home loan broker. It’s often worth having a professional with you at every stage of the process, along with continued support after settlement.
Reach out early to a professional home loan broker. It might be just what you need to get a competitive deal.