Episode 2 - The importance of a Mortgage Broker and Conveyancer

Establish Wealth

[00:21] Tiffany: Hello and welcome to established wealth. My name is Tiffany. This podcast is for people looking to create financial freedom through property, finance, investing and everything in between. I'm joined by my husband and business partner, Toby.

[00:34] Toby: Hello, I'm Toby. We are both property investors, mortgage brokers and financial educators. We strive to empower and educate people to understand their finances, enter and invest in the property market, and to set themselves up for the future and establish wealth.

Hello and welcome back to established wealth where we guide you through the ins and outs of finance and property. My name is Toby and I am a mortgage broker, property investor, financial educator and a property strategist. And I am joined with Tiffany, my partner in both life and business.

[01:19] Tiffany: Hey, I'm also a mortgage broker, property investor and financial educator. Today we'll be speaking about the importance of mortgage brokers and conveyances and or solicitors when you're thinking about entering the property market. Let's touch on mortgage brokers first.

[01:33] Toby: So why should you consider consulting a mortgage broker when thinking about entering into the property market? Or maybe you're thinking about purchasing your next property. Let's start by addressing common misconceptions. Many people believe that going directly to a bank is the best way to secure a mortgage. However, working with a mortgage broker can offer numerous advantages that you might not even get from a bank. One of the key roles of a mortgage broker is to act as your advocate. A broker works on your behalf, representing your interests and helping you navigate the complex world of mortgage lending. Let me explain how exactly the mortgage broker works. Essentially, a mortgage broker serves as a facilitator between you and various lenders, including banks, financial institutions. They assess your financial situation, discuss your goals and preferences, and then shop around to find the best mortgage options that suit your needs and that will align with your goals.

[02:25] Tiffany: Now, you might be wondering how a mortgage broker gets paid. Interestingly enough, most mortgage brokers are free. As we get paid from the lender we pair you up with. We receive a commission percentage of the value of the loan paid directly from the lender to the broker and not out of the loan. This means that brokers have no incentive to steer you towards a particular bank. Instead, we're focused on finding you the best deal and on the back of that, another important aspect to consider is the best interest duty. Unlike banks, mortgage brokers are legally obligated to act in your best interest. They're not tied to any single lender and are obligated by law to find, construct and offer you the best unbiased advice tailored for your unique circumstances, but the benefits of working with a mortgage broker don't end there. Broker discounts are available for the life of the loan, saving you money over the long term. Additionally, a good mortgage broker will provide you regular check ins and comparisons to new products on the market, ensuring that you're always getting the best deal. And let's not forget about the paperwork. One of the biggest advantages of using a broker is the minimal paperwork involved. They handle the entire application process for you, saving you time and hassle. Plus, mortgage brokers have access to a wide range of banks and loan options that may not be available to every average customer. This means they can find solutions that are tailored to your specific needs and financial situation. We take your lending scenario to all the lenders on our panel and make them fight each other to produce the best deal in hopes to win you as a client.

[03:53] Toby: Yeah, mortgage brokers seem pretty good, especially their expert advice is yeah, free. Now let's talk about the constraints of going directly to a bank. While banks may display that they offer convenience, they're primarily focused on their own bottom line. They're profit driven entities that may not always have your best interests at heart and do not fall under the obligations brokers do. Like the best interest duty, banks can only sell you products that they offer, which means they are not able to tailor their lending to suit your needs. Additionally, getting approval for a mortgage through a bank can often involve jumping through hoops and navigating a maze of paperwork and requirements. And perhaps the most concerning is the lack of support when going through the process and the ongoing support that you will get from a bank once your mortgage is approved. Banks dont check with you to see how youre doing. Youre left to navigate the ups and downs of home ownership all on your own. Banks also dont review your interest rate to match the current offerings. They also dont reduce the fees. If the new products they offer match yours with less or no fees. They let you continue paying the premium and hope you dont notice. So when it comes to securing your mortgage, its clear that speaking to a mortgage broker offers numerous benefits over going directly to your bank. From personalized service to access a wide range of products, a broker can help you find the right mortgage for your needs and goals and guide you through the entire process.

[05:21] Tiffany: On a mortgage brokers panel will be specific lenders that do out of the box lending. So sometimes you can go to a mortgage broker if you have a bad credit score, if you have foreign income, if you have a lot of allowances in your payglo sometimes if you go directly to a bank, they don't actually take into consideration your allowances. So by using a broker they know which banks have different niches. So a niche in a bank could be that they specialize in self employed or they are great with multiple titles on the one loan. Some banks specialise in acreages and have certain specifications around that. Some lenders also have postcode restrictions, so you might be looking in a specific location that has a postcode restriction with one lender, but with another lender you can lend up to 95%. Only a broker would know that. They also have access to government grants and schemes that you may be eligible for to reduce your LMI, your stamp duty. Maybe you're in a certain profession that you can get a discount or something waived, some sort of fee waived, and brokers have access to those. If you go directly to a bank, the bank that you choose to go directly to might not even be on the panel to offer those government grants to you.

[06:38] Toby: Yeah, you could really be missing out and making a huge mistake, a home loan being your biggest financial decision. I wouldn't be risking that by thinking you could do it by yourself and go and direct to a bank.

[06:48] Tiffany: Now let's touch on the importance of having a good conveyancer or a solicitor. Purchasing a property is one of the biggest financial decisions that you'll ever make. It's not something that you should take lightly. Having knowledgeable and experienced conveyancer or solicitor in your team is essentially lets clarify the difference between a conveyancer and a solicitor. While both assist you in the property transactions, conveyancers specialise specifically in property law and are licensed to handle the legal aspects of property transfers. Solicitors, on the other hand, have a broader legal scope and can offer a more comprehensive legal advice beyond property matters. So why is it important to enlist the help of a conveyancer or a solicitor when purchasing a property? For starters, navigating the legalities of property transactions can be incredibly complex. Reviewing contracts to conducting title searches and ensuring all legal requirements are met. There are numerous steps involved in the process, and having a professional who understands the ins and outs of property law can save you a lot of time, stress potentially costly mistakes. A good conveyancer or solicitor will act as your advocate through the entire purchasing process. Another key reason to enlist the help of a conveyancer or solicitor is their expertise in spotting potential issues or red flags that you may overlook as a buyer. From zoning restrictions to title defects, there are numerous factors that can affect the value and legality of the property and a skilled professional will know what to look for and how to address these concerns. If they arise, they'll hand all the necessary paperwork, liaise with the relevant parties and ensure that the deadlines are met, allowing you to focus on other aspects of the transaction with confidence.

[08:21] Toby: Yeah, and having a good mortgage broker aligned with a good conveyancer. It can just streamline the whole process and make it really stress free for you.

[08:30] Tiffany: Mortgage brokers and conveyancers need to talk to each other and conduct business together behind the scenes to help the transaction. The property process be smooth all the way until settlement.

[08:39] Toby: Yeah, and most mortgage brokers have a conveyancer that they normally work with and work well with. And most conveyancers probably have a mortgage broker that they work well with. And yeah, if you have a deadline as well, it's essential that you got both these parties that can work well with each other to really speed up the process. So in summary, when it comes to purchasing a property or entering the property market, having a good mortgage broker, broker and a conveyancer on your side is not just important, it's pretty much essential. From ensuring you're in the best financial position to actually go out there and purchase a property to all those legal requirements. You'll be provided expert guidance every step of the way. A skilled professional can make all the difference in helping you achieve a smooth, successful property transaction.

[09:20] Tiffany: When you're purchasing a property, be it your first one, your next one, or your investment property, you really need to build an entire team. So your entire team will definitely consist of a mortgage broker and a conveyancer, that's for sure. But you also need to look at a few of the other people that could be involved, as in your building and pest inspection, you need to make sure that that's done thoroughly and it's not just done by your mate that's a chippy or your brother. I know there's a lot of people out there that do that. You need to make sure that if you are moving interstate or you're needing some sort of requirements when it comes to furniture, that you're looking into shipping companies or removalists, I know that on the day if something goes wrong, but you may need to dip into your emergency fund just to pay for that removalist come in a certain amount of time to help you. But if you have things planned which we will discuss in later episodes of who you need to fill out to have your perfect property team.

[10:12] Toby: Because when making a property purchase, having a team that you can rely on and know that will get the job done. It just removes that stress, knowing that everything's going to be taken care of for you.

[10:22] Tiffany: It can help you plan and make things a lot more cost effective for you as well.

[10:25] Toby: So until next time, that's all for today. Thank you for joining us on this episode of Established wealth.

[10:32] Tiffany: The information just discussed is not to be taken as advice. It is general in nature, meaning it does not take into account your own objectives, financial situation, or needs. It is purely for educational purposes only.

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