Researching the type of loan you need to get to buy an investment property can be a time consuming task, especially when you don’t understand all the features and restrictions contained in the product.
Mortgage brokers solve this issue by becoming experts on the product offerings from all of the major lenders and then recommending the appropriate product for you.
However, it is important to know that whilst most mortgage brokers don’t charge a fee for their service, they do receive commissions from the lenders for signing up new loans. Understanding this, you can proceed with caution when a mortgage broker recommends a particular product.
Find a Reputable Broker
Getting a recommendation from a friend or fellow investor is always a good place to start when trying to find a trustworthy broker. When I say trustworthy, I mean someone who is looking after your best interests and not just recommending a loan that pays them the highest commission.
Ultimately you may never know if the broker is pushing you towards a higher commission product (meaning they make more money) but as long as they solve your loan problems well, then it is a win-win situation.
A good broker should be able to analyse your financial position and give you an estimate of how much money you can borrow. If you decide to proceed with the recommended home loan, they will then fill out most of the documentation required to get pre-approval from the bank.
Dealing with Banks
If you start using a mortgage broker, you may never have to actually speak with a bank during the whole mortgage approval process. This can be a good thing as some banks and lenders have poor customer service. Let your broker deal with the banks and you can just concern yourself as to whether your broker is doing a good job or not.
While they are similar, all banks have their own rules in regards to serviceability (how you can repay the loan) and risk. Therefore if you apply directly to one bank and get approved for a certain loan amount, there is no guarantee that the next bank will approve you for that amount.
Mortgage brokers should already have a good understanding of the restrictions that some banks have and be able to direct you towards the best lender based on your circumstances.
Make Your Life Easier
A key part to being a successful property investor is being able to build a network of experts that you can rely on to make your life a bit easier. Having a good mortgage broker as one of those people is going to make the process of applying for finance easier, quicker and with no added expense.
Unless you are sure you can get a better deal on your own, it is highly recommend that you consider using a broker for your next investment loan.
>> Learn the secrets of creating Massive Passive Income from Property Investing, click here to read more or read my review.