A comparison between respectable mortgage consultant and a leading lending institution (loans officer)

Mortgage Consultant Services

• Can offer more than 400 loan products.
• Works for the benefit of its client and All About Home Loans.
• Earns a commission from the lender only after your needs are satisfactorily met and the loan is finalised.
• Has a selection of many lenders with a broad range of policies, procedures and products to choose from.
• Does this for every client.
• Will emphasise the benefits from many lenders.
• Is completely impartial.
• Will track down what you need from a number of lenders.
• Will calculate your highest possible borrowing capacity from a number of lenders.
• Will allow you to make your own choice after showing you a number of options that could suit your needs.
• Wants to show you as many ways as possible for you to reduce your mortgage quickly and save you money.
• Is fully mobile (with laptop computer) and will be more than happy to come to you for your convenience. Unusual times can be arranged on a case by case basis.
• Is keen to ensure that all parties are kept well informed so that the whole process moves along smoothly.
• Provides peace of mind by helping you find the best loan to suit your unique needs.

Lending Institutions Services

• Can offer only a limited number of loan products.
• Works for the benefit of the institution.
• Is paid based on a salary, not results.
• Is restricted by one organisation’s policies and procedures.
• Is unlikely to tell you why you should be using another lender’s products and services.
• Is unlikely to highlight any deficiencies in the product range or service levels of the organisation.
• Will emphasise the benefits of dealing with the organisation.
• Is not impartial.
• May not have the particular feature or benefit you are looking for.
• May not be able to lend you the amount you need to borrow.
• Will try to convince you that one of the limited number of loan products will suit your needs 100%.
• Is not keen or well equipped to promote all the mortgage reduction strategies available.
• Is unlikely to want to see you outside bank hours or at your home.
• Spends little time keeping your real estate agent and solicitor up to date with progress on your loan.
• Won’t be able to give you the peace of mind that you have been given a number of options and have made the right decision.

The most important aspect when shopping for a home loan are the features and benefits of the loan. After all isn’t that what you look for in a home?

Because lenders use a variety of ways to calculate how much someone can borrow on their income, they all differ in the amounts they can lend. They also vary in the types of income they will take into consideration. These considerations can make tens of thousands of dollars difference in how much the lenders may approve finance for.

It’s one thing to find out what your borrowing power is, but quite a different thing to actually get your loan approved. You must satisfy the lender’s requirements as to the deposit, savings criteria, the location and type of property, your credit record, your stability and reliability of income etc, etc. These are just a few of the things that the lenders’ decision-makers need to consider before committing a decision on a loan application.

Depending on the complexity of the application, the current workload of the lender concerned, and a number of other variables, it could take anything from half a day to a week or so to receive an answer on a loan application. Some lenders have on-line submission/approval capacity while others may be inundated with applications because of a special offer they are running. Whichever is the case, applicants should allow themselves time to search for the right lender and loan and to make an application.

When people start their search for a new home however, they generally want to find out what is available in the market that suits their lifestyle expectations and price range.

Mistake 1 — selecting property before calculating how much you can afford.

How do they know what their price range is until they have calculated how much they can afford to repay and how much the bank will lend them? Have they got all the funds together to complete the purchase and will that position suit the bank’s criteria?

Unfortunately, this scenario is a recipe for frustration. The home hunters then fall in love with a property that they may or may not be able to afford, make an offer, and only then start to hunt in earnest for a home loan.

Mistake 2 — rushing the decision-making process.

Because the pressure is on to complete the contract, time is of the essence. People feel that they have to rush to get an approval as soon as they can for fear of missing out on the property or because of the self-imposed time pressure. This leads to hasty decision-making and insufficient research to find the loan best suited to their needs.

In most cases, because of these time constraints and the hassle in shopping around, people are happy to settle for the first or second bank they go to. What’s the chance of finding the best loan with this limited opportunity?

If the loan is subsequently approved, they are delighted with the result and the search for the best loan ends right there.

Mistake 3 — not shopping around different lenders.

How do they know that they have the best loan deal? Because the loans officer said so? Of course they would. They are not there to sell another bank’s product. What they are really saying is: “It’s the best loan we have available.”

If the application is subsequently declined, will the applicant go to another lender? Often not, because many people incorrectly think that all lenders are the same. They give up the home loan search, the contract falls through and their dream home satisfies someone else’s dream.

Mistake 4 — giving up too quickly.

Why give up the search? Another lender may have been willing to lend more money or may have had different lending criteria. The search should be halted only after a number of traditional lenders and some non-traditional lenders have been approached and have turned down the application.

For people to access all this information and be satisfied they have made a reasonable search, it would take considerable time and effort. However, with one phone call to respected mortgage broker, you can establish your maximum borrowing potential, find out if you qualify (link to loan qualifier questionnaire), learn about the features, benefits and costs of more than 500 loan products and arrange for an application to be lodged. at no extra cost to you.

It makes more sense to obtain pre-approved finance before looking seriously at houses.

Contact Don Hogden today on (02) 6681 6599 or 0417 816 599 obtain an obligation FREE QUOTE .

When people call us for help the most common phrase we hear is:

“We are thinking about ………, but ……. .. Can you help us?”

Some of the things that people ask:

• “We are thinking about applying for a home loan to buy our dream home, but we’re not sure how to go about it.”
• “We are thinking about refinancing our existing home loan, but we think the costs may not make it worth the effort.”
• “We would like to consolidate our various loans to reduce our monthly repayments, but we don’t know where to begin.”
• “We are thinking of upgrading our home to accommodate our growing family, but we are unsure of our borrowing power.”
• “We are thinking of renovating our home, but we still want to get rid of our mortgage quickly.”
• “We are thinking about buying a new $30,000 family car, but are afraid that we won’t be able to afford the repayments on a car loan.”
• “We think our existing home loan may not be appropriate for our needs anymore, but we haven’t got the time to shop around for a new one.”
• “We think our home loan is not reducing as quickly as we would like, but we don’t know what to do about it.”
• “We are thinking about applying for a home loan, but it’s too time-consuming and confusing to shop around all the banks to find the best deal.”
• “We are thinking about taking out one of those so-called ‘mortgage reduction’ home loans that we keep hearing about, but we don’t know what we are looking for.”
• “We are thinking about using the equity in our home to buy an investment property or a share portfolio, but we are confused about who to talk to first.”
• “We are thinking about the wasted money we pay on rent each month, but we don’t know how to get off the roundabout.”

Yes. We can help you.

As you can see, people’s finance needs are varied. That’s why at All About Home Loans we listen very carefully to ensure those needs are completely satisfied.

Our standard service is free of charge to you. The financial institution you select rewards us for introducing you to them as a new client. You obtain exactly the same deal that you would if you approached the lender directly yourself.

We have access to more than 500 loan products and the latest in computer technology to help in finding the right loan package for you.

The service is fully mobile. It’s like having the all the bank managers visiting you at the same time and agreeing on which loan is right for you. Now that’s a nice change!

If your situation is similar to any of those described above, please contact us for an obligation free appraisal.

This case study demonstrates the benefit of shopping around for your home loan and using a mortgage broker to do all the leg work.
Lenders offer a wide array of products and interest rates. Most significantly, there are great differences in the amount they will lend an applicant.

John and Mary*, both in their early 40s, had just sold their rural residential property and calculated that they would have a deposit of just over $50,000 to put towards their new home.

John earns $45,000 gross per annum and Mary earns $15,000 gross per annum. They have two teenage children going to high school, run two cars and have no other liabilities.

The area they were interested in was experiencing an active real estate market and they wanted to borrow to their maximum capacity to buy a quality home.

Their regular bank told them they would qualify to borrow up to $252,000. They told the loans officer that they felt they could easily manage repayments of up to $500 a week, because that’s what they were paying on their previous mortgage and car loan. The repayments on $252,000 were around $330 a week so they had capacity to reduce their new loan reasonably quickly.

Unfortunately their deposit, less an allowance for costs, only allowed them to buy something for around $290,000. George, their real estate agent, was finding it difficult to show them any properties that lived up to their expectations in that price range. As a comparison, George drove them by two properties listed around $360,000 that matched the couple’s vision of a quality home.

Naturally, John and Mary were disappointed that it appeared their dream home was out of reach. They returned to George’s office to review their options. These included:

1. Lowering their expectations of the type of house they could afford. This meant doing without some of the things they were hoping for, like a pool and close proximity to the high school.
2. Looking in a different location where the market was not quite as high. This meant as much travelling as before and the kids having to bus to school or even change schools, which was not a popular option.
3. Somehow increasing their income to be able to borrow more. Mary could go back to full time work, but this also was not favoured as she was heavily involved with two volunteer organisations.

At this point George, concerned about not being able to meet their needs, asked about their lender. He immediately recognised that that lender was not among the more generous ones he was told about during a recent presentation by a mortgage broker.

George suggested they shop around for a more generous lender who might loan them the amount they needed - about $325,000. With his ready reckoner, George calculated that the repayments of around $430 per week would still be well under what John and Mary said they could afford.

On hearing this, John and Mary said, “but we won’t be able to borrow any more; all the banks are the same, aren’t they?” George replied that he had thought that too until it was proven otherwise during the presentation from the broker. George, seeing some hope for his clients, suggested they contact the broker who he knew had relationships with a broad range of lenders, adding that it would cost them nothing to make a quick phone call.

After a few minutes of questions and answers, the broker was able to identify two reputable and well-known lenders with whom John and Mary would qualify to make a loan application of up to $330,000. With one brief phone call, John and Mary had gone from the despair of giving up on their dream to actually turning it into a reality.

In the meantime, suspecting that John and Mary’s position was likely to improve, George had made two quick phone calls to make tentative arrangements for inspection of the properties later that afternoon. John and Mary readily agreed to view the properties and picked up children on the way so they could also be part of the selection process.

The first property was okay, but needed some money spent on it to create an outside entertainment area. On inspection of the second property, the whole family fell in love with it. The pool and outdoor area would be perfect for entertaining and the children could ride or walk to school.

The owners of the property, who were in their early 50s, mentioned during the inspection that they had bought the property when their two children were about the same age as John and Mary’s and it had been a great home to raise kids. The house and the pool were no longer suitable for their needs and they were planning to buy a couple of townhouses for their retirement home and investment.

After a few minutes’ discussion John and Mary, eager not to miss out on the opportunity, asked George to put an offer of $355,000 to the owners (list price $365,000) subject to finance. When George made the offer, the owners said that they would accept $360,000. The couple countered with an offer of $358,000, which was immediately accepted. A deal was struck only three hours after John and Mary first jumped in the car with George.

John and Mary were excited but nervous having made such a quick decision, but they were sure they had done the right thing. They commented to George that they were still a little apprehensive about the financial side of things. George reassured them by saying that it was made clear to the owners that the offer was made “subject to finance”.

The next evening, the mortgage broker met with John and Mary at their home and arranged a loan for $320,000 at a special three year fixed rate below 6% pa and with no application fee.

John and Mary couldn’t believe their good fortune: the home of their dreams, a cheap home loan that met all their needs and, to top it off, no establishment fees or inconvenient bank interviews.

Six weeks later, the family was enjoying a house-warming party with their friends and new neighbours.

THE END (AND A NEW BEGINNING)

* names have been changed

So you are looking to buy a home.

If it is your first home you will be looking for features and benefits such as:

• How many bedrooms?
• Does it have a big back yard?
• Does it have a garage…tin roof…a pool…?
• Is there room to expand as the family grows?

If you are looking for an investment home or property you will be looking for such things as

• Is it built in the time to get negative gearing
• Will it be a good rental
• Is it easy to care for or will it take some renovation

When you go looking for your HOME LOAN do you know how many features and benefits there are over the range of 40 lenders?

Do you know there are features and benefits in home loans such as:

• Flexible repayment schedules.
• Fixed rates or principle & interest or combinations of both.
• Low Doc loans for self employed business people.
• Different criteria for location and type of property.
• Different requirements for savings, deposit and income.
• Different requirements for credit history.

Do you know that lenders have “specials” the same as K Mart or Myers?

• Nil application fees can save you up to $700.
• Special loan set-ups that can save you thousands of dollars over the life of your loan.
• Some lenders have completely different repayment schedules to cater for different incomes.

Contact us for more information about how we can help guide you through the sometimes tricky process of obtaining a home loan

 J & S came to us to see if we could help them after they were finding themselves becoming further in debt. They were paying high interest on their home loan and their credit cards were being used to their limits without the means to repay or clear them.

We refinanced their debts into the one loan repayment and they were amazed at the difference in their lives. This is their response to our follow-up review.

Hi Sue,

Just thought I’d give you an update since we started with you.
We are delighted with the loan we have. We have an easy to manage, straight forward, easy to understand, loan with brilliant customer service from both yourselves and the bank.

We back graded the Territory and now have a more affordable car and have paid off the credit card.

The only debt we have now is the home loan and we now have a small savings we will build on slowly.
Both S and I would really like to thank both you and Don for starting us on the path to financial freedom. There are no words to express how much better life has become.

We are more than happy to be distributing your cards with words of great encouragement to any we pass them on to.

Thank you again

If you feel you are over committed and would like information on how we can help you to achieve a more reasonable or affordable loan repayment and lifestyle contact us.