The Computer Says "NO" !
Sometimes it seems that when you deal directly with the Bank you receive the above answer. In my experience, a mortgage broker can give you a completely different one.
The benefits of using a mortgage broker have become very apparent to me over the last few years, especially since earthquakes. Previously I worked as a mobile mortgage manager for one of the large Banks. In that role I always thought “Why would you use a mortgage broker when you can come straight to me as a representative of the Bank!” How wrong I was. Bank criteria does change constantly and depending on the economy it can get easier or harder. Each Bank can have different strength and weaknesses. For example:
- There are some Banks who have very good criteria for building a new home. Others have one or two extra requirements that make it a little more difficult. One of those requirements is confirmation of full house insurance to be provided before the build commences. This is in addition to the builders risk policy. An insurance company will not provide this confirmation and never have. There are Banks however; who are happy to proceed without this confirmation but it does need to be provided at the end before the final progress payment is released.
- There is one Bank in particular whose debt servicing criteria makes it easier to borrow more funds. Especially good for lower income earners who are excellent budgeter
- There are some Banks who charge a Low Equity Premium when you borrow over 80% loan to valuation ratio (LVR). Other Banks simply add a margin to your interest rate which drops away when you reach 80% LVR or below. Both have their advantages depending on the client’s situation.
- Various promotions from various Banks seem to be running all the time. They are hard to keep track of but generally Banks will match another Banks promotions. But only if you ask them!
- Some Banks and even non-Banks will look at refinancing a mortgage and external debt up to 90% LVR. If your existing Bank is unable to help then you need to consider changing. Quite often another Bank will provide funds towards legal costs which cover the cost of transferring from one Bank to another.
- Registered valuation requirements can vary from Bank to Bank but generally one is required if borrowing over 80% LVR.
These are only a few of the differences between the Banks. The key to this is that not one Bank has exactly the same criteria. Everyone’s situation is different so why not check out the options with a good mortgage broker.
A broker understands what is on offer from each Bank, how well they rate in customer service, what are the criteria at each Bank and how well that criteria will fit their client needs. A great interest rate is important but it is of no use if the Bank is not going to meet your requirements going forward. Why would you investigate this yourself when for free, someone can do it for you.