And why they should always be your first point of call
Once upon a time, when we wanted a loan, especially a home loan, we’d trod on down to our local branch and have a chat with our trusted bank manager. And this may still be the case for many people.
But those who are wanting to find the absolute best deal, know that visiting a bank isn’t the way to go these days.
According to the Mortgage and Finance Association of Australia (MFAA), one in two Australians now uses a mortgage broker to secure a home loan. And because they’re not associated with any lender, it’s not hard to see why more and more people are turning to them to find finance deals.
Choose a finance broker and reap the benefits
1. It’s all about you
And so it should be! You’re trying to find a load to buy a substantial purchase (home, car etc.) so you need a loan that’s going to suit your circumstances. Once a finance broker gets to know you, they’ll be able to find the best products to meet your financial needs. They can then negotiate with lenders on your behalf until they source your ideal loan.
2. You don’t pay them a cent
Many people don’t realise that it’s free to use a finance broker. That’s because they’ll receive a trail commission from the lender once the loan is secured. What this means for you is that finance brokers can get bigger discounts on rates (at the start and throughout the life of your loan) as they are independent, and the bank doesn’t have to pay them a wage that eats up your discounts if you deal directly with the bank.
3. Get your loan approved quickly
Honestly, who seriously has time to do all this loan research themselves? You’ll spend hours Googling products, ringing lenders, or visit banks and end up confused and a bit frazzled. Finance brokers will have contacts at lenders so once they know your financial situation, they’ll be able to get things moving quickly, knowing which lenders to approach on your behalf and pushing for the best deals.
4. Avoid loads of paperwork
There’s always going to be some paperwork involved, but you don’t have to worry about it. The only thing you’d need to do is check it and sign at the end stages of the loan process. Finance brokers will take care of the paperwork side for you, occasionally asking you to provide details they may need.
5. Sorting your finances
Have you, or one of your friends, ever had a loan and found that it ends up crippling them, paying high interest and never seeing the end payment? A finance broker will not only source a loan that suits you, but they’ll show you how to pay down debt, how to create future wealth and give you ongoing support. Think about it – they don’t want to send you broke with ridiculous loans as you’ll refinance away from their loan and they’ll lose that commission. They want to help you from beginning to end.
6. Bust through pre-qualifying conditions
There’s nothing worse than getting all your paperwork organised for a loan, getting excited about your big new purchase and then receiving the big red cross of rejection. Finance brokers should know the different lending criteria of lenders and which ones would give you a better chance of approval, along with a better deal.
7. Finance reviews
A decent finance broker will never find you a loan and dump you. They should stick around to advise you on future actions such as fixing the loan, making additional payments to reduce the loan etc. Finance brokers should help you build wealth, helping you get the lifestyle you want, take holidays, purchase vintage cars, start a new business or do whatever it is your heart desires.
8. Help to pay off your loan sooner
That’s one thing you’ll never get from a bank! Refinancing your loan or taking out a consolidation loan isn’t the best move. Why? Because you may be down to finally paying off the principle on the loan (i.e. you’ve paid all that interest), but you refinance and suddenly, you’re now paying interest on that loan again – banks LOVE it. Finance brokers can help you build good debt, showing you how to pay off your loans quicker and getting access to special deals lenders offer (such as retail points programs, discounts, shopping clubs etc.).
9. Helping you escape the traps of interest-only loans
After an interest-only loan expires (i.e. usually after 5 years, the interest-only part gets reviewed), the remaining loan needs to be re-assessed with a full credit review. Now a lot can happen in 5 years, and your situation from when you had taken out the original loan may have significantly changed. Will you be able to get another loan? That’s where having a finance broker on your side helps as they’ll help you find a new or broker a better deal with your current lender.
10. Don’t play chance with your loan
Did you know that if a loan is declined by a lender, it’s very difficult to get another loan approved? When you use a finance broker, they have more insights into which loans would be approved for your situation, so they don’t play Russian Roulette with your future.
11. Keep your credit report clean
One thing you should be aware of is that every time you apply for credit, it goes onto your credit report. Making an unnecessary enquiry can be detrimental in the long run. Lenders (particularly banks) run a credit score on several items, so your loan can be declined by the computer before it even makes it to a real person. Finance brokers should be able to run these checks before applying to ensure a better success rate with your submission.
With over 18 years’ experience, the Australian Finance Centre are ready to help you
Covering all aspects of lending, Self-Managed Super Funds (SMSF), commercial acquisitions and business finance, Andrew Salsbury and his team can arrange loans anywhere in Australia. Offering an ongoing monitoring program, Andrew ensures your loan stays relevant to you at every stage.
If you’re curious about what you can borrow, visit our website and try out one of our financial calculators. Or if you’re ready to find out more about using a Finance broker, or wanting a review of your finances, please email firstname.lastname@example.org or phone 0411534 791.
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