The help of a mortgage broker means you can have your smashed avo and eat it, too!
Collins Mayaki is a top ranking mortgage broker on the HashChing platform, which is no surprise given he has saved his customers more than $4.3 million on their home loans in the last 12 months – or the equivalent of four homes in Sydney.
With interest rates continuing to climb and Aussie households feeling the pinch, mortgage brokers are in greater demand than ever, negotiating with banks and lenders to keep home loan costs under control.
Mortgage brokers now provide more than half of all home loans in Australia. In the last six months alone, one in three Australians have switched financial institutions (source).
Mr Mayaki said he serviced around five new clients a month, and many of them were coming from one of the big four banks.
“Customers come to me desperately wanting to reduce the financial burden of home ownership, or needing help cracking into property investment.
“I help them find the best loan for their needs from 50 different banks and lenders, and further, I negotiate with the financial institutions on the customer’s behalf. This is very different to the situation when a customer walks into a bank, where the loan manager will only push the bank’s own products, and they count on the fact that customers won’t try to negotiate on rates.
“I’m still astounded that people go directly to banks for their home loans. Having an expert in your corner when you make a major life choice like a mortgage makes a massive difference to the tune of paying tens or even hundreds of thousands of dollars less over the life of the home loan.
“You wouldn’t turn up to court without a solicitor, so why would you apply for a home loan without a broker? They can speak the lender’s language and negotiate a better rate on your behalf. Even better, you don’t even pay a mortgage broker, as they get their fees from the bank,” he said.
With banks and lenders changing rates and introducing new deals on an almost daily basis, mortgage brokers are able to keep up with the ever-changing landscape in order to find the best deals for their clients.
Out-of-cycle rate increases, skyrocketing housing costs, and perhaps too many smashed avos on toast are pricing many prospective home owners out of the market, but according to Mr Mayaki, mortgage brokers are here to the rescue.
“According to Finder.com.au, the average lowest variable home loan rate from the big four banks is 4.98%, but brokers can find rates that are significantly better. Recently I secured a rate of 3.74% for a client, which is more than a full basis point lower.”
Collins’ top tips on how to get the best deal on your mortgage:
1. Do your research:
The power of the Internet means that finding the current average lowest home loan interest rate is but a quick Google search away. Having this vital information to hand will give you a good idea of whether or not you’re paying too much on your current home loan, and it will also give you some ammunition when bargaining with your lender.
2. If you are looking to refinance your home loan, demonstrate that you are a reliable customer:
Before you make your refinance application, make sure your mortgage repayments are up to date. When it comes time to negotiating a new rate, be prepared with all of the necessary paperwork you’ll need to provide the new lender, such as your most recent six-month home loan statement.
3. Follow up:
After you have met with your lender to review your interest rate, make a conscientious effort to follow up with them afterwards. This demonstrates that you’re serious about getting your loan renegotiated, and are likely to go elsewhere if your needs aren’t met.
4. Don’t be afraid:
There are dozens of other lenders out there that would be delighted to have your business. If your current lender isn’t willing to match the interest rate or product offered by another lender, then don’t be afraid to switch. The minor hassle of swapping over to another lender will be outweighed by the tens of thousands of dollars you can save on a lower interest rate product.
5. Consult a mortgage broker:
If all else fails, get a mortgage broker in your corner to do all the wheeling and dealing on your behalf. Brokers are experts in their field who are across hundreds of home loan products offered by dozens of different banks and lenders. They’ll be able to recommend the best product for your needs, and will (figuratively) hold your hand through the entire home loan process.