How to get a home loan that won’t blow up your future, in one easy step.
Beyond its health and human impacts, COVID-19 has put futures on pause and become the source of enormous financial anxiety for many. Across Australia, a reported 1.4 million people are experiencing mortgage stress, with 100,000 nearing default on their home loans. With so much at stake, now more than ever, many of us are carefully considering our finances, strategically restructuring our debts or wondering how to get a home loan that won’t blow up our future.
That’s the thing about debt, isn’t it? It’s a future-me problem, and present-me really, really wants to buy that house. Figuring out what you really need (and don’t) from your loan facilities, how much you can afford in repayments and how to actually apply for a mortgage is just plain daunting and confusing (it’s also why there are hundreds of monthly google searches on “how to get a loan”).
So we spoke to Kearney Group’s Jamie Hyndman about the most important things you should do before locking in your mortgage or refinancing an existing property.
“Finding a home loan that won’t blow up your future requires only one crucial step,” Jamie tells us.
The most important thing you can do for yourself is “find a true Lending Adviser – someone who will partner with you and get to know you in detail, along with your broader goals and objectives, and is not employed by a particular bank or institution.”
So how do you find a good Lending Adviser or Mortgage Broker? Read on for more.
How to find a good Lending Adviser or mortgage broker.
Build a relationship and share your broader life goals.
When it comes to finding a good Lending Adviser or Mortgage Broker, it’s important to work with someone that considers the context in your life – not just the size of your bank account. You might want to buy a new car, go on an annual holiday, or send your kids to school in a few years. So before you sign on the dotted line, you need to be confident that the loan you’ve selected won’t compromise your ability to manage future expenses. Some off-the-shelf products that look good on the surface (low interest rates, for example) might actually end up derailing your plans – and if your broker doesn’t actually take the time to know what your plans for “future-you” actually are, then that’s a very real prospect.
Look beyond the big institutions.
Working with a Lending Adviser rather than a specific bank broker is also beneficial. Remember that time when you went to your banker and they recommended a loan from their competition because it was better suited to your needs? Nope. Me neither. Never happened.
However, choosing a Lending Adviser with broad access to the suite of products from a range of lenders means you’re more likely to find the right loan for you and your unique needs.
Better yet, look for a Lending Adviser who is part of a broader finance firm where you can tap into the advice and expertise of professionals from across the practice if you need. At Kearney Group Strategic Lending, you’ve got access to both our Business Advisory and Private Wealth teams, and truly integrated advice is within reach.
Consider other features of the loans, beyond its interest rate.
Finding a mortgage or home loan that works well for you is more complicated than considering just rates. There are other features of the loan that are worth considering as well. For example, does it have an offset account or the ability to do splits? Are there linked credit cards or frequent flyer programs? Does it have a good app, reporting, reminders and alerts etc? Depending on your needs, these other features can make a real difference to your lifestyle and save you money, both now and into the future.
Pick a lending adviser that will manage the process for you.
One of the great benefits of working with a professional Adviser, rather than a product sales person, is that they should manage much of the application process for you.
Ask your Lending Adviser what is and is not included as part of their service.
Look for someone who offers end-to-end support – from conducting a full scan of the market at the outset to find the best loan for your needs, to filling in and lodging your paperwork on your behalf, to liaising with your lender and solicitor at settlement.
It can sometimes be a long and arduous process. So it’s great to have an Adviser who will manage the day-to-day for you and will be on hand if things get a bit murky.
Best of all, most Lending Advisers offer their assistance to you without charge, or at most a nominal upfront fee to cover the cost of preparing your initial advice should you decide not to proceed with their recommendations.
The 7 stages of applying for a home loan.
- Getting to know you – fact finding.
- Presenting our advice – credit proposal.
- Completing the paperwork – formal application.
- Liaising with your lender through to approval.
- Signing off contracts.
- Supporting you through settlement.
- Checking in.
If you’re looking to learn more about the stages of applying for a home loan or the refinance process, you can learn more here.