How Mortgage brokers help New Zealand house buyers

It is often said that the biggest financial transaction for most people is buying a home. For most people they need to find some sort of financing as hardly anybody has enough cash to buy a house outright so people look for mortgage finance as the means to making that house purchase.

Mortgage Payments

However, people often get caught up in the excitement of buying their dream home and do not fully understand the mortgage financing costs and payments they are letting themselves in for. After all, most mortgages are for 25 years or more which is a long time to be paying money to the lender. So before you get excited about any particular house, it will be a good idea to talk to lenders before you commit to any house purchase.

Most people will go to see their bank since the banks are heavy advertisers of their mortgages and provide lending for the majority of home loans. Also, people think that if they have been a customer of a bank then they will get preferential treatment when they want a mortgage.

However that is not the case. Banks treat each mortgage application on its own merits and show little loyalty to long-term customers. As a result, people are often forced to look at a range of banks and mortgage lenders to find a loan for the house. But this provides a huge problem for potential borrowers are there is a massive range of different lenders and even more different mortgage products to consider.

In many countries, a mortgage broker will be able to provide analysis and advice about different home loans to make the job easier for borrower. In America and Britain almost all mortgages are arranged through a broker however, in New Zealand the opposite is true with 80% of mortgages being completed directly with the banks.

Reasons to use a mortgage broker

Given that the mortgage market is so complex with dozens of lenders as well as the main banks and that each finance company has a range of different mortgages, it can quickly become an impossible task for the average borrower to follow. As a result they turn to a bank to take the easy way out.

However, a mortgage broker will not only understand the different mortgages on offer but they will also be able to assess which ones will suit different people to support their personal circumstances.

So a mortgage broker will save you time and plenty of stress by helping you get a sound grasp of the possible mortgages that are available.

Submitting a mortgage application – a broker can help

Mortgage for house purchase

Once you have got to grips with the various mortgage rates, fees and other lending criteria, you have to complete the application documents. A broker will help you with this process by explaining the various boxes and types of information that the lender is asking for. They can also advise on the documents you need. If you make the application simple for the underwriter at the bank, your case will at least be looked at rather than being turned down because it did not meet their documentation criteria.

Advice on structuring a mortgage

Once you have the application approved you can decide how to structure the loan. Most borrowers have little idea what that might mean but you can fix a portion of the total and have some on a floating mortgage rate.

This sounds complicated and people might wonder why they need to even be concerned about this but it can make a significant difference to your repayments and the interest you will pay.

Put simply, a mortgage broker will work with you to look at various scenarios to show you how you can reduce payments, or make the best use of current interest rates.

Mortgage brokers are not tied to any lender

The majority of mortgage brokers are self-employed either on their own or as a member of a broking firm. They make their income from commissions paid out by the eventual lender. Since lenders tend to pay the same commission and the broker has to declare to borrowers how much they will receive, the broker can select a mortgage that is best suited to an individual’s needs.

However a bank will only be able to offer its own mortgages.

Banks will not lend on some house purchases or certain borrowers. So a borrower will need to find an alternative funding source. This can be difficult but a mortgage broker will have access to second and third tier lenders who may be in a position to provide finance.

Better mortgage terms via a broker

It often comes as a surprise to people that a broker can arrange better terms with a person’s own bank branch than they can negotiate for themselves. The reason is that a broker puts a lot of business to a bank and so they can ask for preferred rates or lower fees. This is a common situation and is perhaps the best reason to look for a home loan through a broking firm.

Finding a mortgage broker

Happy family

Even though only 20% of mortgages in NZ are via a broker there are still plenty of companies you can contact. It is often a good idea to look for someone in your area so it is easy to meet them.

Auckland has plenty of mortgage brokers. Here is a North Shore mortgage broker and this is a mortgage broker in west Auckland you can contact. And for those looking for Hamilton mortgage brokers, this website will help.

The next step

Contact one of these brokers http://hamiltonmortgagebrokers.co.nz/ as soon as possible so they can get you pre-approved for mortgage finance. Then you can start to look for a house to suit you and your family.

The Top Reasons Why You Should Use A Mortgage Broker

People who are in the market to purchase a home or apartment should be aware that they must be pre-approved for mortgage finance before they begin the home shopping process. However, it is not only important that they are pre-approved; they must be pre-approved by the right type of lender. There are different types of lenders that you can choose from. Most people go to a bank but there are others too including credit unions, secondary banks and private lenders are some of the choices that you have, but which option is the best one for you?

More and more potential home buyers and those who are looking to refinance an existing mortgage loan are choosing to work with mortgage brokers. There are many reasons why this lending option has become so popular.

One of the biggest investments most people will ever make is the purchase of a home. Mortgages are financial tools that hold value but it is secured on the property you are buying. That means that if you do not keep up your repayments, then the lender can repossess your property. Many people were misled about lending and encouraged to borrow more than they should. This led to the GFC we have been through these last few years. Many borrowers are now asking questions when they are looking to finance for the first time, or refinance an existing mortgage.

So, why should you choose a mortgage broker? The following reasons may help you decide if it is the right decision for your current financial situation.

There Are More Mortgage Choices Than Ever

Mortgage brokers are able to access mortgages from a variety of lenders. This type of versatility provides the clients with several choices for financing, and the clients are able to decide on the best mortgage rates and options. The partnerships that mortgage brokers develop through their network can include:

• Banks
• Trusts
• National lenders
• Regional lenders
• Credit Unions
• Non-traditional lenders
• Private lenders

Your broker will be able to create the best mortgage for your needs.

Mortgage Brokers Focus On Their Clients

When you work with a mortgage broker, the broker is working for you exclusively. Mortgage brokers do not work for lenders. This means that your mortgage will be tailored to you, and not to the lender.

A Mortgage Broker Can Negotiate On Your Behalf

Mortgage broker on phone

Lenders are in the business of approving loans, and they want to offer a better rate than their competition. A mortgage broker uses this knowledge to your advantage to help secure the mortgage rates that is best for you.

A Mortgage Broker Is Updated On Promotions

Few home buyers know that rates, discounts and promotions exist in the financial world. Lenders offer promotions and special rates several times during the year. Mortgage brokers are aware when lenders are offering these special rates, and they can use this information to determine if any special offers would be beneficial to you.

A Mortgage Broker Can Help Secure A Lower Rate

If you are able to get a lower rate on your mortgage, you may be able to save thousands of dollars throughout the life of your mortgage. Homeowners will often call a mortgage broker for a first time mortgage or refinancing so they can save money. It is important to remember to call your mortgage broker early. Most rates can only be guaranteed up to 120 days.

A Mortgage Broker Is Focused

Unlike lenders, mortgage brokers only work with one type of financial product. They stay updated with the new trends in the mortgage industry, and they use this knowledge to serve the needs of their clients better.

A Mortgage Broker Is Usually Free To You

Brokers do not usually charge their clients a fee. Instead they receive a commission from the lender on settlement of the house purchase. This can be very handy at a time when you are facing many other costs and fees for your house purchase.

You Only Need To Have One Inquiry On Your Credit Report

New home owners

Comparative rate shopping for mortgages can wreak havoc on your credit report. Whenever a lender checks your credit report, the major credit bureaus are notified. If there are too many inquiries on your credit report, your rating may decrease. This can eventually affect the type of mortgage and rates you qualify for. A mortgage broker only makes one inquiry, and this inquiry is used for all of the lenders you are considering.

If you are considering purchasing a new home, or you want to refinance the one you currently own, you should consider talking to a mortgage broker in Hamilton, the North Shore, West Auckland or an Albany mortgage broker. The broker will help secure the best deal for you. A mortgage broker can help people through the complicated maze of jargon, data and offers that are available in the NZ mortgage market.