For The Best Home Loans And Sharpest Interest Rates Use A Mortgage Broker

Mortgage brokers have existed in New Zealand for two decades now but still some people

are uncertain of the benefits of using one in obtaining a home loan and precisely what it is that they can offer that your bank cannot.

Instead of you going straight to a bank or other financial institution, your mortgage broker will furnish you with the competitive and independent benefit of a variety of home loan products. The mortgage broker should stand between you and the lender as your advocate to make certain you get the very best home loan deal.

The introduction of mortgage brokers in the 1990s saw a break from the traditional monopoly of the banks in processing and promoting their own products exclusively. The first careful steps for mortgage brokers in New Zealand were taken in about 1990 and at first one or two banks only embraced the change. Indeed, such has been the expansion of the broker market that mortgage brokers are now the largest sellers of home loan products for lenders in New Zealand, accounting for about one third of all home loans processed.

Your mortgage broker will invariably be paid by the bank for writing up your home loan, with fees typically paid on settlement when the new home loan is drawn down. You should be careful to check this with your mortgage broker at the outset however. You should find therefore, that your mortgage brokers services are at no cost to you.

Times have truly changed and to make sure that you get the very best home loan deal possible, using a mortgage broker is the way to go. It would seem that it is now odds on that you can get the same if not better home loan deals through your mortgage broker. Among other things, using broker networks extensively has unquestionably meant that banks are able to utilise less loan officers.

Mortgage Brokers now have an eminent role to play in placing a significant percentage of home loans in New Zealand and are undoubtedly here to stay. Going directly to a bank effectively limits your choices whereas a mortgage broker will be able to look at putting your home loan with a number of different lenders.

By and large most of the main banks deal with Christchurch mortgage broker networks at any given time although there have been and no doubt will be again in future, periods when one or more bank opts to go it alone. Over the past twenty years there have been times when several of the major banks in New Zealand have not dealt with mortgage brokers for periods of time and no doubt we will continue to see this in the future. However, the mortgage broker network has always had the knowledge of the support of by far the majority of the trading banks at any given time.

By repeatedly dealing with applications for new home loans to all banks and major lending institutions, a skilled mortgage broker should be familiar with criteria for such factors as loan to valuation ratio and debt servicing for all lenders. You can generally rest easy in the sure knowledge that your home loan has a better than even chance of being accepted by the financial institution because, if the application had not stacked up against bank criteria, your mortgage broker almost certainly would not have forwarded it for consideration in the first place.

On occasions if your loan application clearly meets the criteria of more than one lender, your Christchurch mortgage broker may submit it to more than one financial institution thereby giving you choice once the loans are approved.

This also provides you with the ideal opportunity to package all of your bad debt into the home loan at a lower interest rate and do away with expensive credit card debt, overdrafts, personal loans, car loans and the like. A cynic would perhaps suggest that your bank might not be in too great a hurry to make this suggestion to you whereas your mortgage broker has no vested interest in tying you to expensive debt.

Should the chance ever arise in association with a buisness or investment purchase, your Christchurch mortgage broker would also ordinarily take advantage of this as an opportunity to re package any high interest debt such as credit cards and overdrafts so that these are at first mortgage rates, thereby possibly saving you a significant sum per month. A skilled broker will also know the best sources of finance for start-up businesses or franchise funding where there is no business history to display to the lender.

Under no circumstances should you contemplate approaching a part timer such as a financial advisor who dabbles in home loan financing. You should make certain that the mortgage broker you use is an expert and that financing is their core business. Generally speaking, such people do not offer a great number of alternatives for the home buyer. You should check that your mortgage broker is a member of the New Zealand Mortgage Brokers Association. Founded in 1997, the NZMBA is a totally voluntary organisation.

To be a member of the NZMBA there are accreditation programs and training which a mortgage broker must pass as well as having a minimum number of six major lenders who deal with them. These are your guarantees of quality.

There may be situations where major bank lending is simply not accessible to you because of a poor credit record or some other factor and it is then that you may find your Christchurch mortgage brokers connections particularly helpful as they will almost certainly have access to 2nd and 3rd tier lenders. This is however the sort of funding you are only going to put in place if you have no alternative because by the time you factor in the higher interest rate, establishment fees and loan application fees the true cost of credit is usually very high.

If you are looking for impartial advice, the best choices in home loan products, interest rates, advice on the mix of floating and fixed rate loans, interest rates, loan terms, fixed rate terms and reconciliation of expensive second tier debt, there is no doubt that you will secure the best available solutions by engaging the services of an experienced mortgage broker.

by: Ashley Stevenson

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