Banks have been throwing everything they can to keep lending and it has been harder for them in recent times with the changed and property lending restrictions.
SWEETENING THE HOME LOAN DEAL
If you have been a buyer in the property market over recent years, you may have been offered some additional incentive that we (or your mortgage broker) would have talked to you about when your home loan was approved.
The bank would offer some form of enticement to accept the loan offer from them, even as far as to offer cash towards legal costs or other costs. It’s nice to have that additional sweetener but it should not be the sole reason why you use that lender.
Recently, they have implemented some fine print and in broad terms if you repay the loan back within 24 months, you will have to repay the cash incentive they gave you. This is not with every loan, but it is something you may want to know, especially if you have only had your loan over the last year and received a cash contribution.
DISSOLVING THE HOME LOAN SWEETENER
A recent NZ Herald article stated that “offers by banks to pay cash lump sums to people who take out loans are disappearing” and “cashbacks were getting smaller and harder to get”.
The problem with sweeteners is that it distracts buyers from what they really need from a broker which is service, more lending options, better interest rate options, consideration of fees, lending expertise and convenience.
It’s refreshing to see that banks are slowly moving away from these incentives and choosing the right home loan offer from your broker will come down to individual merit and whether the bank meets the clients’ needs.
CHOOSING THE RIGHT HOME LOAN OFFER
Choosing the right home loan, comes down to how well you and your broker communicate with each other from the outset. The better your broker understands you, and where you want to be financially
THE VALUE OF A MORTGAGE BROKER
Based on what you need, your broker will choose a suitable lender for you. Remember, that your broker is not just about interest rate but about the total picture such as;
- The lending criteria and will you qualify?
- Will they lend to the amount you need to borrow?
- Will they loan the amount you need based on the value of the property you’re buying?
- Will you need a valuation and if so, what type?
- What information do they need to approve the loan?
- What are the conditions of the loan approval?
- Will the lender allow rental income, and if so, how much?
- Low equity fees or interest rate loadings
There is much more to what a broker does and the work which goes on in the background to secure your home loan, but you get the picture.
If you want to chat about new mortgage finance or refinance, or maybe you are looking to buy an investment property, then contact us anytime.