Why a West Auckland Mortgage Broker Is The Best Option For A Home Loan

Buying a house is often the biggest financial transaction for the majority of people. Most people need to finance that house purchase by using a mortgage which they have traditionally sought from a bank. A mortgage is a financial commitment for 20 or 25 years so it is a big step and needs to be best suited to your own needs not those of the lender. People typically pay double the amount of the loan because of the interest payments on top of the principle. So before you make that final commitment you need to get good and independent advice.

Won’t my bank help me with house finance?

The simple answer is that yes, a bank will be able to answer your questions and consider your mortgage application. However, assuming your credit is acceptable the bank is only going to recommend their mortgage products. They are not going to tell you that you can get a better deal with the bank next door.

What are the benefits of using a mortgage broker?

The mortgage market is very complicated and is always changing. Most people would not know where to begin in finding the best mortgage option for them. Banks frequently change their rates not only when the Reserve Bank changes its base interest rate but they run promotions for different rates, lengths of mortgages, fixed or floating and many other factors. To illustrate the extent of the problem www.interest.co.nz lists about one hundred different mortgages on offer at the moment.

With all of these changes in mortgage offers it is almost impossible for the average home buyer to understand. Even after analysing all of the mortgages, it is difficult to get a clear view on the mortgage which will work best for your needs.

Advice you can get from a mortgage broker

Given the complexity of the different types of mortgage options it is not surprising that people are confused. This is another way mortgage brokers can help. Some concerns borrowers usually have include:

• Is it better to have a floating rate mortgage or a fixed rate?
• How long should you fix your rate?
• Can you have a combination of fixed and variable rate mortgages?

As we saw, with over a hundred different products to select from, it is incredibly hard to answer those questions unless you are highly experienced in the market.

A mortgage broker will have an understanding of the various factors that affect those questions. Using their experience, they can apply them to your own circumstances and help you make an informed decision.

Advice from a mortgage broker is impartial

Mortgage brokers are not tied to any particular bank so they are not committed to any particular mortgage provider. Brokers earn their income from a commission paid by the lender as a percentage of the mortgage when it settles. The mortgage broker’s fee is going to be very similar which ever lender you choose as the commission is based on the size of the mortgage (which will be the same from any lender) and the rate the lender pays all of which are very similar. So a broker has nothing to gain from recommending any particular lender and their mortgage advice is essentially free.

A mortgage broker is independent

Mortgage brokers are not employed by a bank. In fact most are self-employed and only make their income from a commission which is paid by the bank.

Their job is to understand the mortgage market and be an expert in it. But beyond that, they need to stay up-to-date with the changes in the mortgage products offered by the lenders. Mortgage lending comes not just from banks but there are also other sources. A good mortgage broker will know these other finance options too and will find it easier to enter into a discussion with them than the ordinary home buyer.

Further, a mortgage broker can often arrange a mortgage with better terms than the banks advertise. As a broking firm or even an individual broker might provide a lot of business to particular bank, they can often negotiate special rates or terms for their borrowers. This is something that a bank mortgage officer is not often able to arrange.

Do people use mortgage brokers for their home finance?

In times gone by people were encouraged to save with a local saving institution to build up both credibility with that potential home loan lender and also to generate a deposit or down payment for their home. That is not a relevant tactic anymore as banks have computerised assessment and risk tools rather than relying on the relationship with savers and borrowers.

Unfortunately, the lack of personal contact with a banker means that borrowers do not have a relationship with any possible loan providers. This in fact is what the banks want, a completely numbers driven, automated lending arrangement which cannot be biased by any personal relationship that individual borrowers might have tried to establish. However, since mortgage brokers have frequent contact with the various banks and lenders, they do develop relationships with the major finance providers during the course of their ongoing business dealings with them.

As discussed before, another reason for people to work with a mortgage broker is that the vast array of mortgages that are available. This range is so complex that the average home buyer does not have any chance of understanding the different loans on which are offer. They need the experience and help of a broker to assess the type of loan that will suit each borrower and then short-list the potential lenders to approach.

As a result, in the NZ an increasing number of home buyers contact a mortgage broking service to source their home loan.

Where to find a West Auckland mortgage broker

The services of a West Auckland mortgage broker are not charged to the borrower but are paid for by the commission they earn from the bank. Therefore it makes sense to at least talk to a mortgage broker to get some unbiased advice before you enter into any binding agreement with a bank.