Award-winning broker Deslie Taylor shares her insights into why using a broker is the best way to go, and the most common mistakes made by those who don’t.
Speaking with The Adviser’s sister title Nest Egg, Mortgage Choice broker and Women in Finance Awards winner Deslie Taylor revealed why she believes everybody should consult a broker, and the common mistakes made by mortgage-seekers.
While the consultation around a mortgage broker best interests duty continues, Ms Taylor said she believes the importance of the role of a broker lies in their expertise, as very few of her clients have a great deal of understanding when it comes to home lending.
“If you don’t live and breathe this, it’s not something that you understand,” Ms Taylor said.
From the official cash rate, the meaning of LVR, and the difference between fixed and variable rates, Ms Taylor believes “we’d be silly” to think that the general public have a full understanding of all the concepts that go into getting the most out of their home loan.
“So, it’s our job to educate them and to really allow them to grow, build their retirement wealth, whilst doing it in an educated way.”
On top of expertise, Ms Taylor outlined that brokers give borrowers greater opportunities than going straight to a bank does.
“If you go to a normal bank, they are going to give you one option, and that’s their option,” Ms Taylor said.
“Whereas with a broker, we can show them a multitude of options, and obviously not only that, it’ a credit perspective – because at the end of the day, just because you like a lender’s product and you like a lender, doesn’t mean that your personal financial situation is going to suit that lender, doesn't mean that credit is going to approve your loan, depending on your position.”
Ms Taylor emphasised that using a broker also helps save customers the time and heartache of approaching banks that have inappropriate credit policies for their unique situation.
“Ultimately, the lender’s credit policy also determines whether or not you could go there,” Ms Taylor said.
“We’re able to say, ‘Yep, look that lender’s got a great rate; however, unfortunately due to your personal situation, you don’t fit that credit policy,’ so we don’t waste time even looking at that lender, whereas if they were to go to that lender, it’s not until the lender gets deeper into it that they might have this rejection come through.”
She therefore highlighted that having access to a wide range of products lets brokers pinpoint the most suitable product for their client, taking all the legwork away from the customer.
“Once I’ve determined the product that they really want and that’s going to suit their financial needs, now we’re able to fine-tune for them, do all the leg work, and give them comparisons of the lenders that have those best products that will suit them,” she said.
“We might give them a choice of six products with six lenders, and then we can show them this lender has an establishment fee, that lender doesn’t; this lender has an account keeping fee, that lender doesn’t; this lender’s mortgage insurance is actually higher than that lender’s, because the mortgage insurance depending on the lender and depending on the deposit is higher.”
The benefits to engaging with a good mortgage broker to find or refinance a home loan is immeasurable, considering the potential cost of making mistakes in the application process, Ms Taylor outlined.
“A lot of clients will call me and say, ‘Can you get me a pre-approval with three lenders just so I know I’m going to be OK?” she said.
“They don’t understand the consequence of the more credit enquiries they actually physically do, how that will impact their overall credit score and how that’s going to impact them getting a loan into the future.
“So, they think that they can get a pre-approval with a multitude of people, and they can then just choose the best lender when they find a property – that’s actually a big mistake,” she said.
Another common frustration that occurs, according to Ms Taylor, is when customers do not research the process required for getting a home loan, which can lead to some borrowers leaving financing to the last minute, which causes added stress and anxiety.
“They don’t even speak to anyone. They don’t talk to their lender, they don’t speak to a broker, they just make the phone call and say, ‘I’ve found a property and I’ve got 14 days to get finance,’ and they are the ones that get really, really stressed,” she said.
Find out more about the Women in Finance Awards in the November edition of The Adviser magazine.