A common question that we often come across is this:

“Why should I use a mortgage broker instead of my local bank..?”

There are many answers to the question depending on your own circumstances and what you’re looking to achieve. You may also be surprised about how many areas your mortgage broker can actually assist you with, so we’ve outlined some of these areas below so that you can make a more informed decision when deciding whether to work with a mortgage broker to achieve your financial goals.

Does a mortgage broker cost more than the bank..?

Let’s start with one of the most important questions first to address a common misperception in the marketplace. Working with a mortgage broker does not cost you, as the borrower, any more than if you work directly with the bank. In fact, because the mortgage broker has access to a wide range of banks and lenders will often be able to secure a lower interest rate for you than the local bank will offer, not to mention ensuring that the loan is structured in the most appropriate manner to achieve your financial goals.

It’s important to recognise that your mortgage broker will often be paid by the bank or lender, rather than you paying a fee to them directly as the borrower. This is always fully disclosed to borrowers so you can rest assured that there are no undisclosed fees or commissions being received that may influence your mortgage broker’s recommendations.

Let’s now explore the various areas that your investment-savvy mortgage broker can assist you with:

1. Refinancing your current loan

If you have a current investment property or home loan, chances are you may be able to lock in a lower interest rate or better loan structure to both save you money and fast-track the achievement of your financial goals. This could allow you to look at adding another property to your portfolio with the interest saved on your current loan. It’s important to review your interest rates with your mortgage broker on a regular basis.

2. Extending your interest-only loan

Many borrowers, particularly Australian expats, have faced difficulty when looking to extend their interest only loans on their investment properties in Australia. Regulatory changes have meant that a full submission is now required if you do want to extend your interest-only period, so it’s important that you work with a mortgage broker who has access to a wide range of lenders to ensure that you can find an appropriate solution.

You may find that your current lender is not willing to extend your interest-only loan, which is the case for many Australian expats with lenders placing greater restrictions on Australians living abroad, so it can be a valuable exercise to have your mortgage broker shop around to identify an appropriate solution for you.

3. Accessing equity in your property

Many property investors, particularly Australians who may have moved abroad and rented out their previous primary residence, have found themselves in a position of having a large amount of equity that they would like to access to expand their property portfolio. With the right lender, you could put yourself in a position to utilise the existing equity in your property or property portfolio to look to add another investment. There are still also lenders that are willing to offer such structures for Australian expats living and working abroad, so it’s important to work with a mortgage broker who has a sound understanding of expat loans.

4. Splitting your loan

If you’re currently sitting on a cash balance that you’d like to have working for you, then you may wish to split your loan into a variable and fixed component. The variable component will allow you to utilise your cash balance in an offset account to reduce your interest payable, while the fixed component can provide you with some peace of mind and shelter against future interest rates increases.

5. Extend or shorten your loan term

If you’re looking to reduce your regular loan repayments to buy another property, or due to lifestyle changes, then you may wish to extend your loan term by refinancing. You may also want to pay down your loan faster and therefore look to shorten the term of your home loan. It’s important that you review your current loan structure before making additional repayments to ensure that you won’t be penalised for doing so.

6. Planning your repatriation

Are you looking to buy an investment property in Australia that you’d like to move into when you return to Australia? By setting up your loan appropriately from the start, you can maximise your tax efficiencies for when you return. The same applies if you’re looking to purchase an investment property but also wish to be in a financial position to buy your own home when you do return. By planning ahead, you can put yourself in a much stronger financial position for your return.

7. Securing your loan

Of course, the most obvious way a mortgage broker can help you is to secure your home loan or investment property loan from a lender that suits your situation and financial goals. A savvy mortgage broker will review all of the lenders available, identify the best option for you and take care of the ‘leg work’ to ensure that most of the administrative burden is reduced for you as the borrower.

As you can see, having the right mortgage broker in your corner can be an incredibly valuable decision and set you on the right track to achieving your financial goals.

Ally Home Loans Pty Ltd is your ally in finance for all of your home loan, investment property, business and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.

Book an obligation-free, complimentary consultation here today.

Ally Home Loans Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.