Step One: Finance
Finance first to start the Buying Process.
Tempting as it is to apply for finance using your bank’s online loan calculator, there are better ways to find out how much you can borrow.
What can you afford? Have you got a deposit? Will you be leveraging the equity you have in another property?
While you may be able to answer these questions yourself, getting objective advice is always a good idea. You may want to consider the input of an accountant, a financial planner, your bank and a mortgage broker before applying for a loan. Each profession offers different services, and each will give you insight into your true financial position and borrowing capacity.
Financial advisors can help you plan your long-term financial strategy. They will help you to objectively define what you can afford and they work for you. Their professional agenda is to help you understand your finances and he or she will advise strategies to achieve your financial goals.
Financial advisors charge a fee and may also receive referral fees for loan or investment products that they recommend.
Mortgage brokers will research the loan products that are potentially available to you. They will make recommendations and present the most suitable finance products to you. He or she will also handle the paperwork associated with the loan application process and will communicate with lenders on your behalf.
Mortgage brokers don’t usually charge a direct fee – they are paid a referral fee by the lender that you choose (if you choose one they have recommended and if your loan is approved).
The loans manager at your bank may be able to offer you a discount based on the value of other products you have with them. Conversely, the loans manager at a different bank may offer you a discount that wasn’t offered to your broker if you move all of your banking products to their institution.
Bank branch loans managers have sales objectives of their own to meet but he or she will be best placed to explain the full suite of banking products they have on offer – not just loan products.
Not everyone needs an accountant in addition to a financial planner. Those who are self-employed or have multiple investments, however, may need one to certify their statement of position before a loan is approved.
Accountants can also advise the potential tax implications of positively or negatively geared investment properties.
Appoint an experienced property agent to negotiate a better deal on our next home.