Here are some of the best questions to ask a broker to see if they specialise in investment property
Why is it important to get a mortgage broker for your investment property?
It is important to get a mortgage broker for your investment property because a broker with experience will be an expert on the sheer amount of options out there for different lenders as well as different loans. Prior to working with you, most mortgage brokers will already have wide-ranging experience working with homeowners, everyone from experienced property investors and first-time homeowners. After all, a mortgage broker’s main aim is to find the best loan tailored to each person’s own specific situation.
In other words, a mortgage broker will usually take the following approach to find the loan most suitable to your specific situation: work with you to understand what you can afford to borrow; protect your credit file report (CFR); ensure you meet the criteria for the loans you are applying for; work with you to understand your goals and needs; and handle the entire loan application process, all the way to settlement.
Another reason it is important to get a mortgage broker for your investment property is that he or she will have access to multiple banks, saving you and the lender both money and time.
The broker should be specialised in investment property
A broker who specialises in investment property will make the time and energy it takes to find the right investment loan easier for you. It can be challenging to navigate the application process and secure the right lender. For investment properties, a mortgage broker will curate a list of products that make the most sense for your investment goals and compare varying options for investment loans. Since property investment, at its core, is to some degree a financial game, a mortgage broker will find you the most affordable rate and therefore further reduce your cost of finance.
Find out the broker’s level of experience with property investors
In order to figure out how much experience your broker has with property investors, you can ask the following questions:
1. Does the broker also invest in property? If the answer is yes, who is the broker’s investment loan with? Why?
2. How long has the broker worked as a mortgage broker?
3. What is the most recent experience the broker has had in helping a property investor?
4. How many lenders does the broker work with?
5. Are there any fees for the broker’s services?
6. How much experience does the broker have helping property investors?
Ask if the broker is willing to disclose how much he/she gets paid
The mortgage broker will be required to disclose to you how much he or she is getting paid for arranging a loan for the client. Additionally, the mortgage broker will also be required to disclose a list of the selected bank’s commission rates.
Ask if there are fees for his/her services
For researching and sourcing of a loan, a mortgage broker will receive pay in the form of an upfront commission by the bank, usually as a one-time payment. Since the upfront commission is a pre-determined percentage of the amount of the loan, the amount that every bank pays will most likely differ.
Find out if it is less expensive to get an investment loan through a mortgage broker
Typically, it is cheaper to receive an investment loan through a mortgage broker, since most mortgage brokers do not charge fees for their services. Instead, lenders usually pay for commission. It is also likely that mortgage brokers will save you cash in more ways than one, depending on what your goals are. For example, a broker will compare a list of the best choices, if your goal is to secure a competitive interest rate. On the other hand, going straight to the lender will only give you that lender’s interest rate as an option.
Ask his/her recent experience helping a property investor
Mortgage brokers will have clearer knowledge of your future goals or plans when investing, and of the structure that might suit you best, if your broker is an investor him- or herself. The broker would also be aware of the different banks that carry the best policies for specific situations, as well as a better understanding of the differing borrowing capacities with various lenders. A broker with recent experience helping a property investor will be able to use this information and knowledge to your best advantage.
