How To Choose a Good Mortgage Broker
One of the most important people to have on your team as a property investor is a mortgage broker. But how can you actually find a good mortgage broker?
0:54 – Start with a recommendations
1:15 – Look at customer reviews, level of experience and time in industry
1:50 – Access to as many lenders as you can
5:15 – You need to be able to get on with your broker
7:45 – How does someone engage a mortgage broker
10:20 – Getting a feel for your broker
11:00 – Finding someone who has longevity in the industry
12:55 – Summary of how to find a good mortgage broker
15:04 – A good broker will give you a path
One of the most important people to have on your team as a property investor is a good mortgage broker, someone who can access multiple different lenders show you how much money you can borrow, advise you on how to get better rates, or how to increase your borrowing capacity. But how do you actually find that good mortgage broker and that good person for your team? So today I have with me Michael Brown, from mortgage broker, Sydney Comdata. You to talk through this about how can you find a good mortgage broker? How can you approach a mortgage broker and how the whole process works? So hey, Michael, thanks for coming on today.
Good Ryan. Good to be here.
So finding a mortgage broker, if someone’s you know, not in the industry, they don’t have a recommendation from someone they just kind of googling mortgage broker? How can they go about kind of starting to identify who might be a good fit for them? And who might not be? Alright,
well, the first thing, of course, is if you’ve got friends or family colleagues who have at least had someone and dealt with a mortgage broker and have had a positive experience, we all know, that’s probably going to be the best way. But if you’re starting green, if I could put it that way, and you’re just going to put it out there, then I guess you’re looking for things like customer reviews, you’re looking for the level of their experience, perhaps their time within the industry. Now, none of those things on its own is a guarantee, but at least it’ll start pointing you in the in the right direction. Because I’m a mortgage broker needs to have I Well, I think, and I’m probably attached by us having even been in the industry for a while, but you should have some pretty good industry experience, you want to have as many of the lenders, that the sorry, you want to have access to as many lenders as you can. And you want to have
does that vary significantly from mortgage broker mortgage broker, which lenders they have access to, or the most mortgage brokers have access to everyone?
No, most mortgage brokers don’t have access to everybody. Because different people are employed under different I suppose in different within within different silos. So you could have, you know, completely independent mortgage brokers who will have access to the broad range of the industry, but some of the branded brokers would have less or fewer accreditation across all the major banks. So you might have someone who is within a franchise, for example, would have a significantly limited portfolio,
which is interesting, because you would kind of think, as a lay person who’s not in the industry, you would kind of think the opposite, that if someone’s franchise, and it’s a big company, then they’re actually going to have access to more lenders than an individual. But I don’t know if it has something to do with, you know, buying power and these groups negotiating with particular lenders and featuring them?
Well, some of those things are true. Look, I’m not necessarily saying that just because you’re a franchise, you don’t have access to a decent range of lenders. But as you say, some of those franchise, franchise instance, or businesses have limited their lending panels to take advantage of the sort of things you were just talking about. You know, buying power with a particular lender means that, you know, they might have only four or five different options, rather than 25 different options. Now, just because I’ve got 25 different options doesn’t mean that I’m going to use all 25 of those lenders. But what it does mean, when your particular circumstance, you know, comes to my attention, and we find that you have a particular issue within your application, that we’ve got four or five times the options that you know, then then some of the others. Yeah, well, that’s all I think you would probably come up more with those nice circumstances, if someone’s having trouble getting money, being able to access more. It really does. I mean, the premise of a mortgage broker, of course, is that they will, they will act in your best interest and in fact, we’re just about to be legislated under law by that. So that that change which perhaps we I would suggest that most mortgage brokers would already have been doing but we are best interest Judy takes effect as at one January, which means that by law, we have to act in our clients best interests, not our own, not the banks but but by the clients. And of course, we are generally as the way that we get paid is by the bank. So When you’re fronting up to talk to a mortgage broker, most of them are not going to charge you just for a home loan. And they, so there’s no reason why I think he wouldn’t go to speak to a mortgage broker.
Well, that’s it, even if you decide not to use them, or you go with a different broker or something like that, you could at least go and talk to them, get a feel for them, see, they’re someone that you want to work with they, and then if you decide they are, and they help you with the home loan, then they get paid by the banks in a quarter for that.
And you’ve touched on something which I speak to my potential clients about all the time. And you really need to be able to get on with your broker. Because you’re going to pass on a lot of sensitive information for a start, you’re going to be explaining some goals, potentially some dreams, and you’re going to rely on them for professional advice. So if you don’t feel like that you can trust them at the start, it’s probably not going to be something that you can really feel as a good fit. And as a broker, if I don’t feel that I can trust my clients, certainly, it doesn’t happen very often. But there are times when I’ve have actually had suggested that they might want to look elsewhere as well, I’m definitely in the minority. And I’m certainly doesn’t happen very often.
Well, as you said, we are sharing a lot of sensitive information, there’s also going to be a lot of back and forth, especially if issues come up with the loan or, you know, you need more explanations for why this is happening, or you got a situation and if you’re going to be dealing with someone back and forth like that, you really want to have good communication with your broker and that good rapport there. And so I guess, meeting with a broker for the first time or talking with them on the phone and getting that sort of rapport and seeing if you guys vibe together.
Yeah, that really is it, we really do need to have at least some basic level of togetherness vibe, if we could put it that way. Because I’m advocating on your behalf. So if I don’t believe in you to a degree, I’m just not going to do my best work. Like he can put whatever cliches you like around it. But simply, I need to be confident and trusting and believe in what you’re doing. And to a degree, you need to do the same about me, because then it works for everybody, you know, we all want, we all want to put our best foot forward here, I want I want to present you to the bank, as best as I can. And, and and and you need to have the confidence in me that the place that I’ve recommended, and that you have finally selected is the place that you know, is where you should belong.
And how should someone engage a mortgage broker for the first time, let’s say they’ve never applied for a loan before, they don’t know how the whole process
works. Look, I have that conversation so many times as you could well imagine in my career. The first thing that I do with them is that I try and make them feel at ease. Because generally our first interaction is on the phone, it isn’t always better generally, it’s that I just want to make them feel at ease, I want them to be comfortable that I know what I’m talking about. So I would normally give them a you know, a short 32nd spiel about my 30 odd years of experience working in this industry. Some of it with major banks, some of it with, you know, the last 17 years as a broker, I give them a little bit of my personal history so that they feel comfortable that I’ll understand what it is that they’re trying to do. And, you know, I’ve done various lending transactions in my life as an individual. And I think that people will feel more comfortable if they know that I’ve already done what they’re about to contemplate. And they explained to them that the way that we get paid so that they can feel comfortable that, you know, they’re not sitting on a clock where every six minutes, they’re going to incur another $100 bill. And, and, and I give them a few examples of the banks that we can deal with, just so that they get a some comfort that, you know, we’re not going to dodgy brothers proprietary limited for our finance. And usually after we’ve had all of those things, and I also explained, you know, we’ve got systems I’ve got, you know, people that helped me they’ll be in contact that it is a very intense time in terms of communication. You’re right there is there is a lot of back and back and forward. And I need to explain to people that you know, I’m asking this additional question for a reason. I just don’t know it’s just not because I’m nosy.
I’m not a sticky bake. I actually needed for your application. You know, I don’t really care what you do with your life. You go do you but
we need this but really Really what I’m what the reason I’m asking these questions is simply because when we go to bank x, whoever that may be, I want to present Ryan in the best possible light so that we’ve got the greatest chance of success. Yeah. And that, I think, is what it’s all about. And once you’ve had those discussions with people, most people go, Okay, I’m either happy or not happy to move forward. And just, you know, doesn’t work, obviously, for every single person. But once you’ve had those discussions, as even as a customer, or as a broker, you get a feel for the other person, you’re going to either you’re going to feel comfortable, and you’ll immediately move forward, or you’re going to go, Well, I need to talk to someone else until I get that feeling.
Yeah, exactly. And there’s no harm in talking to other people until you get that feeling and find someone that you want to work with. And then if it’s a broker, like yourself, and they end up being in the industry for a number of years, if you’re a property investor looking to purchase multiple properties, then you know, you’re going to be in the industry for a number of years as well. So it can be helpful to have someone that can see through that sort of time. Yeah, look,
I think it would be difficult for you, particularly if you’re a property investor, and you wanted someone who understood the complexities of your situation, it’s not likely that it’s going to be a new person to the industry, it’s possible, it’s just not likely, mostly, you’re going to find you’re going to or you’re going to want to find someone who has seen your situation before so that they can feel comfortable in dealing with it.
That’s where it starts to get more complex, right? Like, if you’re just a first homebuyer, then it’s pretty straightforward in terms of, you know, organizing a loan and getting that done. But if you’re a property investor, who owns multiple different properties in different states with different lenders, then things start to get a bit more messy and more complex. And someone with more experience, who’s likely seen similar situations to yours in the past and dealt with those issues with banks in the past, they can draw on that experience.
I think that’s right, look, certainly as a first homebuyer, to some degree, there’s a formula there, which either you’re going to fit or you’re not. And that sort of blurs the further you get into the industry. And the more property you have about, you know, really, what is this person’s income across their potential self employment as we, as we’ve discussed, and multiple investments? How do we structure that? That’s, that’s the sort of thing that I think you’re more likely to get a pretty good hearing on from someone who’s been around for a while. Yeah, we don’t need to knock the people who are new to the industry, and they will get there eventually. But I think you’re more likely to get a better outcome. If you deal with someone, as you say, who’s seen that kind of thing before?
Yeah. So I think that gives people a bit of an idea of how to find a good mortgage broker, it’s really not that complicated. If you’ve got a referral from someone and they had a positive experience, that’s a great place to start. Otherwise, some googling online looking at, you know, one of the reviews for that person, and then just talking to the mortgage broker, pick up the phone, call them or fill out a form on their website, get in touch, and then talk to them and see if it feels like a good fit for you. If it’s not, that’s totally fine. You know, keep talking to people until you find someone that you’re like, yes, this is someone I want to work with, and make sure that communication stays good. And if you know falls apart, then you can always, you know, use someone else next time.
Correct. We don’t we don’t ever want to get to the point where you use someone else next time. But and, you know, everyone works very hard for that. But you really do need to get to a place where you feel comfortable. Because this is a trusted part of your team. As you as you said at the very start. If you’re a property investor, you’re going to have a team of people around you that do various tasks within your world. And and I think a good mortgage broker is a pretty decent part of that.
Definitely, it’s a huge part of that. Because if you don’t have the right mortgage broker, especially if you’re investing in multiple different properties, if you go to someone they say, look, you can’t borrow, then that can be kind of the end of the line for you. And I know that’s happened with Ben who I work closely with and other investors that just been like, Oh, I can’t buy a third property. And then later they speak to another broker, and they’re like, Yeah, no, you actually can work.
Well, that’s right. You need you need to get someone who give you an honest response. And look, there are times when I’ve gone back to people and said, You can’t borrow. It just can’t happen now. But that’s because I know that they can’t do it. And there’s no real benefit to me in in not doing the loan apart from gaining a level of trust with the client. You know, as we’ve discussed, we only get paid once the loan is done. Yeah. So but but if you’re going to tell us Someone that they can’t do something, you’d want to be pretty confident that is the case.
One, I think that a good broker as well will say you can’t do this. But here’s if you change these things you can or maybe your properties need to go up in value a little bit or rents need to go up or your income needs to go up. But at least they’re giving you guidance on, you know, you can’t do this in a current situation. But if we can get your situation to this, then you will be able to, and you’ve got that guidance and ability to move forward. That’s better than just saying you can’t borrow see, like,
we never delivered that in that fashion. Not very well,
either. I’m being extreme.
But But yes, you’re right, and what a good mortgage broker will give you a path. And that path might be, you know, as short as a couple of months. But it might be a couple of years, until such time as you’re in a position to go again. But at least you will know then what what needs to be done or what has to happen before you can reasonably front up to to go for property number 236, whatever the case may be, yeah. And because at some stage, you will inevitably hit the wall. It’s just a matter of how far into the future.
Absolutely. And so people want to get in contact with you, as a mortgage broker to purchase a property or get a loan, how’s the best way they can do that, Michael,
the best way to do that is to go to our website, mortgage broker sydney.com.au. There, you can either submit through the online portal there or give us a call and we’ll come back to you. We’d love to help.
All right. Well, thank you so much, Michael, for all of the advice that you’ve given. I hope that everyone out there has found this helpful. Go ahead and check out some of the other videos that I’ve done with Michael around the lending changes and where we’re at at the moment as well as things you should do before applying for home loans or how to get yourself ready for that so that you’re more likely to get approved. So go ahead and check those out. And until next time, stay positive