Mortgage brokers - getting the right advice

I recently started my prop investing journey and have spoken to a few Mortgage brokers (MBs). There are differing viewing on how much serviceability you can get from which lender (biggest factor!), what interest rates are available, order of lenders for every purchase etc.,.

What are the good and bad advice you have received? In which circumstances do you get a second/ third opinion? When do you use a MB vs going to a lender yourself? What are red flags when using MBs? How do you ensure that the MB has filled in the forms correctly and you don't pay the price for your lack of knowledge or engagement? Which lender is good or bad for your short/ long term - for e.g. Is Ram's a last resort lender like Liberty? Could you go back to the bigger banks or lenders after you have used them?

No offence to any MBs but just trying to educate myself (and hopefully others) through this conversation. I didn't post this in the 'Property finance' section as I wanted views from everyone. Thanks.

 

I can't speak for everyone but I send out a copy of the application data for the client to check to make sure it's all correct - if you're concerned about the broker being fraudulent, just ask for a copy of the data if they don't provide you with this.

A red flag would be if they show very little interest in your longer term plans, and just concentrate on the transaction at hand. Also if they concentrate largely on rate when you're looking to build a portfolio.

I would leave RAMs until later generally unless you needed them for a niche reason like 4/5 on one title for eg.

It's not always a good idea to chat with too many people - there can be more than one way to a destination, and 3 equally good brokers may have slightly different ways to get you there. When it comes down to it, having someone you communicate well with is the most important thing - if there's something you don't understand, ask them.

 

I used to work for rams. They are a pretty good lender for lots of people. Like jess said they have a few niches. Trouble is their reps only deal with one bank, so like walking into a branch, you won't get an independent comparisons between lenders, which is part of what a MB should provide.

Have a read of some of the brokers post here and get a feel for their style. They will have their company names and contact details as their signature in each post. They specialise with investors whereas most brokers don't. They will be keen to keep a good reputation with clients they get from a public Internet forum so won't muck you around or do the wrong thing.

 

Thanks... All good replies and info.

I am still looking for more good and bad advice, red flags when dealing with MBs.

 

Here's an easy red flag or two...

The broker:
* Doesn't see any problems with cross collateralising.
* Leaves you with unanswered questions.
* Doesn't give you a clear explanation why the lender and product they recommend is well suited to your needs.

 

Hi,

All excellent questions! As a mortgage broker I know for a definite fact that there is a huge difference from broker to broker, and finding the right one can be really hard.

I would look for:
Experience - not necessarily in years (many old brokers still get it wrong, and worse, they can be complacent!) but if they understand the unique needs of the savvy investor. Have they dealt with investors before with substantial portfolios? Have they untangled a messy portfolio before? Have they done security swaps?
Knowledge - most banks and brokers cross collateralize - simply because it's less work (lazy loan set up) or they lack understanding as to why you shouldn't.
Communication - how quick are they to get back to you? Can they explain the process in detail and answer every question. Are they open and transparent?

Finally, how well do you get on with them? Is he or she likeable? I think this is important, if you find a good broker hang onto them! Have a life long relationship instead of a one off transaction.

Best of luck!