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If you are serious about buying a property in the next six months, now is definitely the time to get your loan pre-approved. If you are not sure on the benefits of pre-approval, make sure you have a quick read of What is a pre-approval and do I need one?
With the sheer volume of lenders and products on the market, it is nigh on impossible to explore and understand them all. This means that most homebuyers tend to look for the simplest option and take one of two common first steps:
- Go directly to your existing bank
- Reach out to a mortgage broker
Going directly to your existing bank may be the easiest option at first, this makes sense considering you have possibly been dealing with them since opening a bank account in primary school. You know them and they know you, and they generally have all your up to date information. Unfortunately, the main problem with this is that you are only exploring one lending option. Who knows what better alternatives may be out there for you? Well, mortgage brokers do.
The role of a mortgage broker is to thoroughly understand your current position, goals and objectives. They then use this information to research and present you with the most beneficial lending options. At Rising Tide our Lending Specialists (mortgage brokers) conduct lending research based on the below model:
- FIRST STEP: Eligibility
- The first step is to shortlist the lenders that will lend you the required amount of money you need to achieve your goal. People aren’t always aware that there can be huge variances in lending capacity from lender to lender and this can be the difference between you buying a dream house, a not-so-dream house, or no house at all.
- SECOND STEP: Process
- Like eligibility, there can be huge differences in processes. It could be simple stuff like accepting e-signatures or online identification. The biggest differentiators are the turnaround times. Meaning, how long does it take a lender to pick up an application and assess it after submission. At the time of writing this, we know there is a major lender taking up to 28 business days to assess an application, whilst other lenders are taking 2. Long turnaround times could mean you miss out on a property as you are unable to bid.
- THIRD STEP: Product
- Once the lenders have made it through the eligibility and process check, the final step is product. This is putting lending options together based on the suite of products, features, interest rate and fees. As we are sure you have guessed by now, products can also vary greatly from lender to lender.
If you don’t have the knowledge, time or desire to do the above research thoroughly, reach out to one of our Lending Specialists today – we’re here to help.