Finding The Perfect Loan

Have you been watching the interest rates drop and doing the mental arithmetic telling you that you can buy a property for almost the same as renting in many major cities at present. Property values have fallen, rents have increased and interest rates are back at historically low levels again, so the stars have aligned for your next property purchase! So what is the next step? Do you head to your local bank to see what they are offering and get locked into one of the few products they have available, or do you jump online and wade through the online options and hope like crazy they suit your needs?  Or do you go and see a Professional Lending Specialist, and have them look at your situation and find a loan that is suitable for your specific needs (Which may or may not be at your own bank!).

Keeping in mind that today’s home loan market is extremely competitive and flooded with hundreds of products, and that the loan with the cheapest rate may not actually be the one that costs you less in the long term due to fees and charges, and the lack of flexibility. The cheapest loan may also be one from a bank with a conservative lending policy which if you apply for and get declined adds another enquiry to your credit file! In order to find the best loan that is right for you, you need to comprehensively research as many products as possible. So how much time do you actually have to do this, and will you understand the differences in loans anyway?

This is where the Professional Lending Specialist can provide you with an offering that does this for you, and you will still save on what you were going to pay at your bank as well! Imagine having a personalised shopper that would  go with you everytime you went shopping. Lets say you were looking for some new shoes, and there were hundreds of shoe stores in your local area. Your personalised shopper could actually get a shoe in your size from every store and help you to try it on to ensure that it is perfect for you before you even commit to buying them. They would also often be able to obtain a discount on the shoe that you finally decided on, that is cheaper than the price you would have been able to obtain yourself. Would this be a great service that you would consider using? The ultimate result is that you get the shoes that are ideal for you for less than you would get them form your local shoe store.

This is very similar to the difference in going to a broker for a home loan compared to going directly to the bank. A good broker has detailed knowledge of each lenders policy and can ensure that they will only recommend a product that is ideal for you. They can find a lender that will consider your loan when your own bank may not, and then they ensure the loan you are recommended is competitive and potentially save you thousands on the standard bank product. A broker with access to all the major banks plus many other lenders not available directly to the public such as ING, Macquarie and Adelaide Bank is more of a consumer advocate, working for you to find the best lender and product, not just flogging you the same old product they give to everyone in a one size fits all manner.

So how does a broker get paid? They receive a commission from the lender that they recommend. I have heard it said that this must cause a conflict of interest, and I am sure that in some cases this may be possible, however most brokers are in the business of creating long term repeat clients and live for referrals from satisfied clients. In fact, over 60% of our new business comes from referrals, and that is off the back of very satisfied clients. In most cases the commission received from the different lenders is much the same anyway, and it would be the last thing on our mind when making a recommendation to a client. Keeping in mind that this commission does not get paid by the client, it is paid by the bank, reducing their profit margin on each client due to the lower acquisition costs.

One of the key reasons clients benefit from using a broker though is because we have access to all of the lenders policy manuals and can determine which lenders will consider each unique proposal and client, and which ones will not. This places us in a unique opportunity to know which lender to refer a client to get the best chance of approval. And the policy difference if quite vast between the banks, creating a great deal of opportunity between them. Knowing your chances in advance will also ensure that there is less chance of a second application being required, which can also reduce your chances of approval with lenders that credit score. Having too many enquiries on your credit history can adversely affect your chances of approval with many lenders.

So if you are reading the signs in the property market at the moment and can see the opportunities to buy a property, it may be the time to act by meeting with a Professional Lending Specialist to determine your borrowing capacity and provide you with a clear indication of your options. We would love to be able to assist you into your new home!


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