How much help does a mortgage broker really provide to you? We’re going to take a look at some people who saved money thanks to their broker.
Did you know that most lenders don’t show you everything that they have to offer?
[Tweet “There are all sorts of loan structures that you don’t have access to. And even if lenders show you everything, you may not have the time to go through all of that information.”]
That’s why many new investors just go with their current lenders when looking for investment loans.
And it’s also why so many investors end up with unsuitable financing structures.
That’s where a mortgage broker comes in.
A mortgage broker works with you to help you to find the best possible mortgage for your situation.
They’re duty-bound to have your best interests at heart. This means a good broker shouldn’t recommend a mortgage that’s not right for you.
They also have contacts. Great brokers have experience working with banks and lenders of all sizes. They know who to speak to and understand the industry.
Then there’s the convenience. Why collapse under the weight of all of that paperwork when a broker can handle it for you?
Despite all of these advantages, a lot of people try to go it alone. They’re not convinced that a mortgage broker can help them.
You might find yourself in the same camp. That’s why we’re going to introduce you to a few Wealth for Life clients who might change your mind.
How Peter and Joanna Saved Over $7,000
In 2017, Peter and Joanna came to us with a problem. Both in their mid-30s, they had a 30-year home loan with their bank.
They didn’t want to spend the entire 30 years repaying the debt. They wanted to get it repaid faster so they could make themselves debt-free.
During an initial advisory session, we told the couple that banks may not offer their best interest rates to clients.
Armed with this information, Peter contacted his bank. After being with them for five years, he thought he could get a better rate than the 5.79% he currently had.
The bank agreed. They gave him a new rate of 5.13%, which equals a saving of $261.25 per month in interest payments.
That seems like great news. But we knew the bank hadn’t done the best that could for the couple. We got on the phone and got the rate dropped down to 4.75%.
Peter was absolutely livid.
Why would his bank give us a better rate than they gave to him?
The couple made the decision there and then to start looking for another lender. We booked an appointment with our brokers and took all of the hard work out of their hands.
With our help, Peter and Joanna now have a mortgage with a rate of 4.28%. That equates to a massive saving of $597.70 per month compared to their original loan.
That brings us back to their goal of repaying the mortgage faster.
With the new rate, the couple will save $7,172.40 per year. If they put that money towards extra repayments, they’ll pay their mortgage 4 years and 5 months earlier than anticipated.
They’ll be debt-free quicker and will make a total saving of $173,969 thanks to our mortgage brokers.
How Our Brokers Helped Paul and Stephanie Create a Low-Risk Strategy
When Paul and Stephanie Blackman attended a Wealth for Life event in 2017, they came in with a plan. Both in their 40s and with a child, they wanted to get started with property investment.
But they’d heard all of the horror stories from other investors. They’d heard about terrible tenants and they didn’t want to put their own home at risk.
They also didn’t want to take on another mortgage. That would just add more financial stress to their plates.
So they came to us with a double-ended challenge. Could we structure financing that would allow them to invest without putting their home at risk?
And could we help them invest without affecting their current lifestyle?
They needed a low-risk strategy, so we started the education process. Our team demonstrated that it’s important to buy in the safest way possible. And to do that, you have to pay attention to your financing.
We also spoke about the importance of having money left over for the “just in case” scenario.
It’s all about creating safety nets and buffers.
With that, our brokers got to work.
We structured their finance using two lenders. This meant they could invest without putting their home at risk.
Then came the issue of investing without dealing with a mortgage that would change their lifestyle.
With our help, the couple found a $520,000 property that generates $470 in rental income per week.
The structure that we created meant that they made a profit of $90 per week from that property.
That’s after making the mortgage payments. This made the mortgage a non-factor in terms of its effects on their lifestyle.
But that’s not all. That extra $90 per week goes into extra repayments on their original home loan. With this new structure, they’ll repay their loan more than two years earlier than anticipated, which will save them a further $32,000.
And that’s not counting the capital growth their properties will experience.
Working with our mortgage brokers allowed Paul and Stephanie to create a finance structure to suit their situation.
Stephen Clancy Takes Back Control of His Homes and Saves Over $7,000
Now in his 60s, Stephen Clancy came to Wealth for Life in 2017. A mechanic for over 40 years, Stephen had problems with both his family and holiday homes.
In short, his bank held the titles of these properties as security against his investment properties.
Stephen correctly identified that this put his homes at a lot of risk. If something went wrong with his investments, he could lose everything.
He needed to restructure so he could take back control of his titles.
During his initial meeting, we took a closer look at his situation. And we saw that the loans he had on his investment properties didn’t just put his home at risk.
Neither gave him the best deal when it came to interest rates.
We spoke to him about the importance of regularly reviewing your loans. And with that, he gave us his original loan agreements and our brokers got to work.
We restructured his finance to ensure neither of his homes would get held as security against his investments.
Then, we looked at the investment property loans themselves.
For his first property, the lender dropped his interest rate to 4.09% from an original rate of 5.03%. That equates to savings of $270.65 per month.
We achieved similar results for his second property. For that, the lender dropped the rate from 5.03% to 4.28%. This equals a saving of $341.45 per month.
All told, that means annual savings of $7,345.20. Stephen can pump that back into building his portfolio or use it to repay his loans even earlier.
With Wealth for Life, Stephen took back control of the titles to his properties.
Better yet, he found better loans for his investment properties that save him thousands of dollars per year.
The Final Word
The simple truth is that the banks may not give you the best deal possible.
Each of our clients discovered that better deals existed. That’s all thanks to our mortgage brokers.
So, do you really need a mortgage broker?
If you want to lower your outgoings and take back control of your property, the answer is a resounding YES!
All that’s left is to get in touch with the team that can help you.
Book your one-on-one session with a Wealth for Life advisor today and learn how you can escape your fear and build an amazing future.