Should I still approach a Mortgage Broker

I am having my own home as well as the investment property under the same leading bank. I got equity built up over both properties. Should I still be looking to borrow for a second investment property through a mortgage broker or should I deal directly with the same bank.

 

Hi Darrelj,

I'm a bit biased, but definitely see an investment savvy broker. There's a lot more to lending for INV and the bank teller is highly unlikely to have any idea about the best way to get you to your goals.

It's difficult to form a good strategy with only one lender to choose from.

 

If you used a mortgage broker previously and are happy with the help and advice they gave you, why wouldn't you go back to them?

Working with someone who already has an understanding of your circumstances and existing strategy can be a huge benefit.

 

Will your existing bank have the best product for you, out of all the lenders out there?

 

I bought a pair of running shoes from Adidas showroom. I bought another pair from the same showroom for my son. I want to buy another pair for my daughter.
What I know:
- The shoes are great.
- The showroom is nice

What I dont:
- If I would have paid less for same shoes if I went to Myer
- If I would have got better Adidas shoes if I went to a reputable shoe warehouse
- If the Nike shoes are as good as Adidas
- If I can get a shoe consultant customise shoes for my daughter's feet

 

So you are saying he should forget about the house and buy a pair of shoes?

 

Ha ha ha. I also wonder.

 

Nothing wrong with going direct, as long as you know that you will not know what else is out there. Hopefully they structure the loan correctly too.

 

That's a pretty big 'hopefully'!

 

Typical scenario I've seen when someone goes direct to their bank is as follows.
Get two or 3 (or however many) properties with the one lender, get stuck due to serviceability with that lender THEN decide to look for a broker to help them.
Broker then has to uncross the securities/sort the mess created by that bank in order to move forward with re-structuring/accumulation/whatever the client is trying to achieve AND sometimes it's not possible.
Granted it's not always the case but it is pretty common, some bankers are better at the structuring piece than others.

 

Just wanted to give the OP a non-broker view point. But agree with what you have both said.

 

I was wandering ,
1. if the mortgage broker chooses a different bank to the one i am presently having my property with - will the process increase my workload and hassle as there will be two banks that the MB will get
involved with.
2. will i have to move all the mortgages to the other bank

 

Depends..

You’ll just have to sign a few things, provide statements, fill in fact finding doc.. does that count as increasing workload?

In my experience, they’ll try to. Sorry to say this, but the broker will get paid more commission in moving all your loans. But there is no reason why you can’t just say not to touch the existing loans. It all really depends on your servicing.

 

Which is where you have to trust the broker, and they have reasons for doing it (features you want, better rate, more future borrowings).

if you dont think the broker adds value or dont trust the broker to be acting in your interests, dont use them.

 

Using a second lender usually means setting up a direct debit to make the loan repayments from one lender to another. There's no extra work in the day to day management.

You don't need to move everything. If anyone tells you this is needed, make sure they explain very clearly why.

 

And your structuring. Sometimes you'll need to move more things around than you see necessary in order to accomodate what you want. A good broker may see things you otherwise wouldn't.

 

Had this exact scenario recently where we were using one of dad's securities for a parental guarantor... he didn't even realise they were cross secured... not a problem until it is a problem!

@darrelj at a principal level the broker needs do the best thing by you and give you options. The options are going to be more broad e.g. across the whole market not just within one bank therefore you'll be able to setup the most competetive offer with the structure of your choice.

 

1. Couple of extra forms, you would have to supply all the same supporting data as one application. If a small amount of extra effort allows you to do what you're intending to do, would you see this as a waste of your time?
2. Not necessarily - Most brokers aren't just in it to move all your loans to get the highest commission, any broker that is would likely be viewing you as a transaction and not a long term client. However in saying that, if it's the only option that allows you continue with your strategy then would that be an issue for you?

 

Sorry you've had a bad experience with a broker, no need to tar all brokers with the same brush.
If someone says "I want to achieve X" BUT "don't touch my existing loans" and the only way for the Broker to get you to X is to refi one or two or all of your existing loans then don't be surprised if you never get to X.
IMO clients shouldn't be telling the broker how to do their job, certainly nothing wrong with suggesting "If possible I would like to leave my exiting loans as is" a good broker could then present a couple of options, one leaving existing loans as is and the other with refinancing one or two or however many, point out the pros and cons of each option.
Clients do need to understand WHY the broker has recommended a particular strategy/solution, this is a big part of the broker's job, to ensure the client understands why they're recommending what they are recommending and the benefits over alternatives (if any).

 

What reason is there to keep the existing loans? The borrower likes the colour of the logo?