Investment Savvy Mortgage Brockers

Hi,

I am a looking to buy first home as primary place of residence in Adelaide Southern Suburbs at $400-500k. I have contacted a brocker and he has estimated our borrowing capacity with the lender that he thinks is most appropriate.

I have listened to a lot of The Property Couch Podcast but still don't really understand what a good investment savvy brocker is meant to do beyond this for a first home buyer? Also, how do you locate a good one???

We will look to add properties beyond this one but don’t have a firm plan re:how this looks at the moment.

Thanks,

 

What features did your broker suggest? Offset account? Redraw?

 

A broker's job is to get you finance, recommend lenders, products etc

It is not to provide legal advice on the first home owner grant, stamp duty, tax advice on deductibility of interest, what property to invest in, investment strategies, where to buy etc

none of this would be covered by their insurance and it would be illegal to advise on most of that without proper licensing.

 

So when people say to find an investment savvy brocker, why does this actually mean??? Is it less relevant for first home buyers?

Thanks,

 

Nah, didn’t get into that. Wife is casual and will only have 3 months of pay slips and I am medical wanting 10% deposit (medical) so advice was that we didn't have any other options apart from CBA unless we wait 3 months longer.

 

If you want to invest in property you will ideally want a broker who has experience with helping clients get investment loans. Less relevant with a first home buyer - unless you plan to buy more.

 

Op suggest you learn how loans work yourself. At least understand what offset and redraw mean and how they are different for tax purposes.

 

How often is a first home a last home?

Even if they don't plan to buy more, they probably will - a good broker knows this and can help them plan ahead so they can retain flexibility and are structured right in the event they do buy more. And if they don't - no harm done.

 

I think what you might be needing is someone who digs a bit deeper into your longer term plans and goals, then helps to set things up in a way to accommodate those outcomes.

 

Would help if you at least have a think about the future. Will you move to another city? Work as a locum in another city or overseas? All of this matters to the features you want in the loan.

 

Investment Savvy is a buzz word, meaningless - what they actually mean is "find a good broker"

 

like us!

It is a phrase brokers use to try to show they are different to the rest.

 

I don't think there is a clear go to checklist on what makes a broker "investment savvy" I think it comes down the way they talk to you. If they just ask for your income then say "hey you can borrow this much" then that may be a little concerning, however if they ask questions about your priority with the purchase and your future plans with property so that they can suggest lenders based on that and explain their logic along the way, then I think that is at least a good starting point.

 

Nailed it

 

I have no idea what it actually means. Its not too specific in its description.

It's a marketing word brokers use to help explain what their niche is. Plenty of good brokers have a focus group of clients they primarily work with (first home buyers, etc).

Investment savvy is a description of someone who is likely to be well versed in working with investors. On PC, investment savvy generally relates to those skilled for resi specific property investors with small-medium sized portfolios. This in general, would encaspsulate the majority of property investors by numbers.

Most 'investment savvy' brokers won't be all that well versed in dealing with plenty of investing segments though:
- E.g. brokers in general often have limited product knoweldge/access and experience to catering with the very very wealthy (e.g. 8 figure territory).
- Many have limited experience in working with mid-large scale investors looking for advanced products/finance that goes outside standard residential securities.

In general, institutional finance structures are often here to meet this market - who are also very investment savvy!

 

What about the old 'finance strategist'. Haven't seen that used for a while

 

MY, MY, MY, ...

Someone is digging up the past .

 

Really? I don't agree
A good broker might not have a clue about investments - how to structure them, how to maximise borrowing capacity, what additional risk certain lenders pose, which lenders are horrible for first home owners despite their really low rates...

There a million things a good broker won't know that an investment savvy one will. It's a completely different way of thinking.

 

Clearly our definitions of what a makes a 'good broker' differ.
A good broker can do all of those things you mention, I've yet to meet one that can't and if they can't they are far from good in my opinion.
They don't need to have a BS tagline of 'investment savvy' it's a meaningless buzzword used by people trying to funnel gullible people into using their referral partner brokers IME

 

Spot on, if a broker doesn't know how to structure investments or increase servicing capacity they wouldn't be a broker for long.
A lot of brokers try to differentiate themselves with the BS tag lines, but any competent broker can take care of this stuff. It's not rocket science