Friday, July 10, 2009

Our Mortgage Broker Rocks

At first I was very skeptical about going with a mortgage broker. When we started this process one of the first things I did was to call my current bank and arrange an appointment with a loan manager. This was great I got direct access to the bank, I could just walk into the branch and sit down with the mortgage manager. I felt very secure that I was getting everything I needed and I had a direct line of communication with the bank I knew was giving me a good deal.

All of this security was also there because when we had bought our current house we had gone through a mortgage broker and I distinctly remember this conversation:

Room4acubby to Mortgage Broker - "Why have we not received our loan documents and approval documents yet?"

Mortgage Broker to Room4acubby - "There is a delay with the bank you will need to speak to them."

Room4a cubby to Bank - "Why have we not received our loan documents and approval documents yet?"

Bank to Room4acubby - "Because you are using a mortgage broker you will need to ask them what the delay is."

This conversation went around in circles, my face got redder and I got angry with not much to show for it. Eventually of course everything was sorted out, settlement was good and all of the red in the face was for nothing.

Now that I am older and maybe wiser, I thought I would never do that again. Then I was being sneaky during our land search and thought I would use some free online property valuation tools to get an estimate of what our future house was worth. After entering all of my contact details etc I got a vague idea of what it was worth but not too much help really. Within a week however I got phone calls from a whole lot of people trying to sell me loans etc. (I think I'd clicked a tick box that asked if I was currently seeking finance).

On one of my calls I recounted the above conversation to a poor telemarketer who probably couldn't care less, but I think I confused him enough that he put me on to his manager. His manager, after finding out the huge amount of debt that we were willing to go into said he would put me onto "one of their good brokers."

It turns out he wasn't too wrong. Our current broker has managed the following:
  • Confirmed to me that our current bank was the best option (it always feels good to be told that you are right).
  • Got a better discount on the standard variable rate than the mortgage manager was willing to give me.
  • Gave us the idea of spousal transfer (see early post on Sell? Invest? Hold?)
  • He has also managed to get a huge valuation for our current place (great for capital gains implications).
  • Also last night he told us how to pay for demolition etc. on our purchase mortgage.
As we now have such a huge valuation we can now borrow more (not that we want to go into more debt than we need). However this means that items that we thought would have to come out of our savings and reduce our nice buffer of cash that we had. Now we will still have this buffer and be able to use our mortgage to pay for some essentials in the building process.

I don't think my banks mortgage manager would have had these ideas.

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