Buying their first house can be an intimidating process for the average first time buyer, and they may need some good advice, some good coaching and encouraging, and some very good consultancy and assistance when applying for a new mortgage.
Mortgage brokers are well placed to deliver all these for the first home buyer. Every loan applicant is different, and a smart broker will know all the right questions to ask their client in order to complete full discovery for the bank. The broker will need to know that they have all the relevant details, including an accurate assessment of their clients income, their borrowing risk, their banking history and their risk tolerance. At this early stage the mortgage broker will probably need to advise their client on what is the appropriate level of risk that they can take on board. Many clients are initially very ambitious about the type and cost of house if they want to buy or build, and the broker may have to give them a dose of realism if the financial risks look too great. This will probably involve advising the client to choose a lower cost house to buy or build, or even to wait for a period until their finances reach a more stable point. For more information, visit NZMortgageBrokers.info.
Once the broker has properly advise their client and has a very good picture of the accurate financial situation then they can apply to their chosen lender for pre-approval of finance. If the broker has done their job properly then they will have solved all the upfront problems for the client, and the pre-approval should be fairly straightforward. At this point the client is in a very strong position where they know they have finance and they know what they can pay, and this means they can go along to auctions and discuss and negotiate with real estate agents. The pre-approval is for a maximum level of finance, and in most cases the client will settle on a property for less than what they have been pre-approved. They may choose to still ask for all the finance, so that they have some cash left over to do minor improvements on the house. The smart mortgage broker will have already built this in to their original application to the bank, so that the client can for example build a new driveway or a new fence immediately after they have taken possession of the house.
The job of a mortgage broker is not just to apply for finance on behalf of their client but also to manage the process including the application and sometimes including the dispersal of funds to the client. A good broker will also stay in communication with the client, and check in periodically that everything is good financially, and even offer further advice when required. Many mortgage brokers keep their clients for years, and become the go-to person when the client needs further funding in order to do some developments on the house or even to change their house for example. For independent mortgages in Invercargill, click here.