Barefoot Investor Talks Sex

Posted by Simon Dehne on March 11, 2014 in Latest News with No Comments


Like many of you, I look forward to reading what Scott Pape from the Barefoot Investor has to say in his Saturday column from the Herald Sun.

This weeks article talked about sex. Thats right sexually transmitted debt to be exact. He developed three rules or advice on what we all should do to keep ourselves clean. Although, I like his recommendations I thought I would clear up one assumption he made about applying for credit using mortgage brokers. Now I need to be upfront and come clean that I am also a mortgage broker, so I guess I will be biased. However, I have been dealing with mortgage brokers for over the last twenty years and from my experience in dealing with mortgage brokers 99% of them are wanting to do the right thing by their clients. Scott suggests that under the new credit laws that are about to begin on the Wednesday 12th March, we need to be careful that we do not tart ourselves around. He points out that we need to be very careful using mortgage brokers as they may apply to dozens of different lenders and thus those applications may potentially be recorded and stay on your credit file for five years.

What he is saying in terms of not applying for too many loans is spot on. If you have too many applications being lodged with numerous lenders, the thinking from the banks is why. Did the other banks reject your application, is their something that I am missing on the application or has the loan application materially changed so you can get financed approved. By shopping around, you are creating doubt about your credit worthiness.

The point i would like to make is by going to a professional mortgage broker, they are experts at what they do. They deal with over 30 lenders and 800 products on a weekly basis and they know what lenders can do, both from a pricing position and just as importantly from a features, service and credit policy perspective. The goal of all the mortgage brokers I know are about helping the client find the best deal and do this as smoothly and as efficiently as possible. Mortgage brokers who are skilled in their profession, know what each bank is looking for and if they do not, they will have strong relationships with the banks to find out. The key pint here is, they have no interest in lodging multiple loan applications as this wastes their time, makes them look poorly with the banks who often measure conversion ratio’s to assist with training and productivity indicators and more importantly they want to ensure you the customer has a smooth and efficient experience so you will stay with them as a customer and possibly refer friends and relatives to them. Mortgage brokers do not get paid a salary they earn commissions from lenders once the loan is settled, so they need to be efficient and terrific at what they do.

So Scott raises some good points for you to be aware of, however using a professional mortgage broker is probably one of the smartest decisions you will make. The only thing I would do is to ensure they are members of the MFAA (Mortgage Professional Association of Australia) or the FBAA (Finance Brokers Association of Australia) who both have a stringent application process and a detailed code of conduct.

The other smart thing you can do is narrow your bank and product options down, before visiting a mortgage broker to save yourself time by using a comparison home loan site like ours.

 

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