By far and away one of the most common questions I get asked by my clients; is there any benefit to arranging our finance through you instead of going straight to a bank? In my mind, it’s one of the most important questions that should be asked because the outcomes from a good mortgage advisor and a bank can be poles apart.
If you don’t have time to read this whole article now, you can have a quick look at the differences here – http://darkhorsefinancial.com.au/loan-approval-centre/compare-us-to-the-bank/
Different clients have different needs. Working across the spectrum, I see those who are looking to refinance and get the best deal for their existing mortgage. Those that are entering the market, either for the first time or who are looking to move out of their existing property and purchase another. And of course investors, who make up the largest percantage of my clients. Usually, existing investors understand the importance of structure but it’s something that doesn’t always occur to my other clients. Commonly these clients come to me after having gone into their bank or maybe one other, they’ve met with a loan officer and they’ve then been referred to me after this experience by friends, family or colleagues. All too often the stories they tell me are the same. “He looked about 23, I didn’t have confidence that someone who has ever had a mortgage themselves will set it up the right way”, “she didn’t really seem to understand what was important to us,” “they talked to me about a line of credit, and I don’t understand why they think that’s something I should have” are just some of the things I hear. After asking a few questions I almost always find that what the client has been offered is a product that suits the bank and not them, is more expensive than other home loans that are available (often even through the same lender) and in some cases completely at odds with what should be offered to the client.
Usually I meet these clients before they have gone ahead with finance so the only cost has been time and effort. However, I have met clients that have not been so fortunate. An example of this was a couple, investors, who had purchased an investment property 8 years before I met them and were introduced to me by another client. They had a low level of debt on their own home and approached their bank to enquire about funding the investment property. What should have been a straight forward process was anything but. The clients were given a Line of Credit that combined the debt from their home and their new investment. Apart from it not being separated out for tax purposes, the product was more expensive than the correct alternative, and created horrific accounting issues that resulted in them paying much more for tax returns than they should have. Given they were instructed by the bank to run all their living expenses through a credit card attached to the line of credit to maximise points, whilst they lowered their overall debt position over time, their proportion of non tax deductible debt increased. Had the clients been given the correct structure, they would have owned their home outright by the time I met them but their reality was that they owed more on their own home and less on their investment. The opposite of what should have occurred.
Apart from having access to a wide lender panel to ensure their clients have the best chance of securing you competitive finance, a good broker will be an expert in property investing, and should be an investor themselves. They should understand the different structure options available and help educate their clients so that they make decisions for their future based on sound knowledge. Having the right structure is just as important if you are just refinancing an existing mortgage, and your credit advisor should take the time to know your future goals so that they are factored in appropriately. They will have a sound network of industry professionals surrounding them, such as accountants, conveyancers, solicitors, buyers advocates and so on that are available to their clients when needed. And of course, a good broker will deliver a high level of service. They will keep you informed through the process and be available after hours to take your calls, emails and enquiries.
So many clients don’t get the outcome they deserve simply by walking into a bank branch. Check out the difference between Dark Horse Financial and the banks here, and you’re a step closer to ensuring you get the right outcome. http://darkhorsefinancial.com.au/loan-approval-centre/compare-us-to-the-bank/
Credit Advisor & Financial Strategy
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