Deciding which lender to use when securing finance is a big decision that all home owners and investors will have to make during their property ownership journey. Choosing the best lender is a time consuming process which involves a vigorous amount of research, however, when you engage the services of a trusted mortgage broker it will enable you to make the decision with greater clarity and confidence.
As a mortgage broker, I am often asked how I source the best deal for my clients. The answer is through the application of a strict process that my team and I follow when selecting the most suitable lenders for our clients.
There are three stages of the process that we work through when deciding which lender is the best fit for our client’s particular situation and goals. These are:
Stage One – Where does the deal work?
This stage is of the utmost importance, as it is vital to select a lender with policies that are most suited to our clients’ unique situation. Every single client that walks through the front door will have their own particular nuances about themselves as borrowers, and specific goals that they are seeking to achieve. In contrast, all lenders in the country have their own credit policies and niches. It is our job as mortgage brokers to remain fully informed of any changes within lenders credit policies, as this knowledge enables us to take full advantage of new opportunities or to eliminate potential threats in relation to our clients.
We take into account a number of factors at this stage and they include:
- In what way do our clients make a living? Are they self-employed? Do they rely heavily on commissions, bonuses or overtime? Do they have any investment properties that generate rent? Do they have a share portfolio that generate dividends? Are they employed full time, part time or casually? Do they have any miscellaneous income? How will the lenders treat all of these different income types?
- What are our clients living expenses? Do they pay rent or do they live at home rent free? Do they currently have a home or an investment mortgage? Do they currently have any personal loans or credit cards? Do they have any HELP debt? How will the lenders treat all of these different expenses?
- What are the clients trying to achieve, and are the lenders products able to reach these goals? Are the clients seeking to utilise a family guarantee? Are we looking for a home loan? Are we looking for an investment loan? What is the loan to value ratio? How will the lenders treat all of these scenarios?
Stage Two – Who can give us the best deal?
Within this stage, we approach numerous lenders that are most suitable to our client’s situation, and negotiate the best deal on their behalf, prior to presenting the client with most economically viable options. We regularly negotiate substantially larger discounts than what is offered to the general public and rarely settle for the advertised interest rate. Contrary to popular belief, all lenders pay us very similar amounts and our opinion is not swayed by the commissions paid. Commercially, it is in our best interests to secure our clients the best deal possible.
There are a number of factors that we take into account when negotiating with lenders including:
- What is the size of the loan? Are the clients going to make interest only repayments or principal and interest repayments? Are the clients seeking a variable or fixed rate? What is the loan to value ratio? Is it a home loan or an investment loan? Which lenders would be willing to negotiate the best deal for my clients?
Stage Three – Who will offer our clients the best post settlement service?
Once we have narrowed our search down to the most suitable and most competitive lenders, we then look at what the banks can offer us in terms of service post settlement.
We look at a number of factors including:
- Do they offer a nationwide branch network? Do they offer excellent online and phone banking? How well do they rate for client satisfaction? Do they offer an easy to use banking experience? What other products can they offer our clients to add more value? Which of these factors are the most important to my individual clients?
As you can see there are a number of variables that go into the decision making process, and as mortgage brokers we assess each of these factors and match the client with the most appropriate lender for their current situation. Working with both clients and lenders on a day to day basis, we have been able to develop an intimate relationship and a vast understanding of banks written and unwritten niches. Due to this wealth of knowledge, we are able to give our clients the upper hand by sourcing the very best deal available to them.
If you would like a professional on your side when navigating through the lenders and their various offerings, please feel free to contact me and I would be more than happy to arrange a complimentary initial consultation.
Best of luck!