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Wednesday, February 10, 2016
Having a mortgage expert on your side can be the key to getting your finance over the line, and may save you thousands in interest and fees.
When Nathan was offered the opportunity to purchase his mother's property in Tasmania at a favourable price – just $180,000 for a house worth $350,000 – he wanted to take the opportunity to consolidate other debts. Using the equity available in his own property, he applied to refinance to cover both the debts and the favourable purchase, expecting to have all the loose ends tied up relatively quickly.
This was not the case. When Nathan tired of waiting for the bank to sort out the valuation on the Tasmanian property and decide whether it would approve the loan, he visited an MFAA Approved Finance Broker.
"He said it was taking forever, so he came to see me," says Nathan's finance broker."
Based on the little information he had gleaned during his original application, where questions were raised about the loan-to-valuation ratio , Nathan walked into his new credit adviser's office assuming that he would need to apply to a specialist lender.
"After doing a credit check, and looking at the figures, serviceability and the rest of it, I couldn't see any reason whatsoever to need to go to a specialist lender. His credit checks came up clean, so I put it to a prime lender," says Nathan's finance broker.
"I chose a lender and product I knew quite well. The product itself is one of the cheapest in the market and doesn't have annual fees, and I knew I could order upfront valuations with the lender. When the valuation stacked up, we knew we had something that we could do."
The loan settled, with Nathan able to consolidate his debts and purchase the property from his mother.
"He was happy to go and pay a higher interest rate to a specialist lender," says his credit adviser. "It would have been at least one full per cent higher in interest."
On the loan amount of $350,000, getting expert advice meant making serious savings. Even assuming Nathan would have refinanced to a prime product after a few years, he saved more than $12,000.
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Source: The Mortgage and Finance Association of Australia (MFAA)