Getting lending is one of the biggest obstacles investors faces when purchasing an investment property, so finding the right person to help you get the lending is essential.
A lot of investors are unsure whether they should use a broker or go directly to the bank, so what’s the difference?
At the end of the day, both the bank and the broker are trying to get you lending because they are incentivized to do so – that’s how they get paid. But there are more factors to think about than that...
In both cases, the person you’re working with will sit down with you to understand your current financial position and recommend products to suit. There are a large variety of mortgage products out there, such as fixed, floating, revolving credits, etc. so it’s important to get the right advice.
The main point of difference between banks & brokers is that banks only have access to their own funds and are therefore restricted to their own internal banking policies. Mortgage brokers usually have access to up to 30+ lenders (depending on which company you go with) which gives them great transparency across the industry to try and get you the best deal. Different banks have different lending policies which mean in certain cases, Bank 'A' might be easier to get lending from than Bank 'B' and your broker will be aware of these differences and can assist you with getting approvals.
Mortgage brokers operate on a commission model from the bank so their service is free of charge to you as the client. This is a big drawcard for a lot of investors because they are getting a valuable service without the fear of committing any money to a below-par service. The same goes for interest rates – it is important to note that you will not get a less favorable interest rate if you go through a broker. In fact, brokers often fish around the different lenders to try to find the best deal on pricing.
Mortgage brokers are working for you and are generally seen to be more positive when it comes to getting deals across the line. Good mortgage brokers can often come up with 'creative' ways to get your loan approved that the banks wouldn't consider.
At the end of the day, working with a high-quality mortgage broker is generally regarded as the preferred option and something we recommend to our clients.
What do we do?
We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.
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