Buying your first home or investment property is exciting. It is probably one of the biggest purchases most people will ever make, which is why getting it done right is crucial. As thrilling it is to buy a new home or investment, it can be the most nerve-wracking, too, because getting a mortgage and closing the loan can be a long, complicated process.

Shopping for a mortgage and getting it approved is one of the most important parts of buying a home. Soon as you are ready to kick start your buying process, you will need to figure out where and how to shop for a mortgage loan that suits you. There are a number of lenders out there to pick from but the question that arises is whether to go directly to the bank/lender or get a mortgage broker. It is a reasonable question, given how lengthy and complex the process can be. It does not matter if you are refinancing or buying a new real estate, you will need to work out the loan application and navigate through all the offers to secure your funds. Banks and brokers are both good choices but understanding how both functions will help you determine the best option.

Here’s how Mortgage Brokers work and their advantages?

A mortgage broker acts as a middleman between the mortgage lenders and borrowers when shopping for a mortgage product. When buying a real estate or refixing, a mortgage broker can help you identify the best suited mortgage offer to your specific needs and situation. Brokers not only help you get the most competitive rates and prices, but they also check and verify whether the offered loan is a good match with the lender. An experienced broker will be quick to determine the best lender for each individual borrower. They simplify the loan process for you as they work with everyone involved in the lending process – from the real estate agent to the underwriter, closing agent and mortgage lenders– to make sure a borrower gets the best loan and the loan processes quickly and closes on time.

It is our job to “do the math” and provide you the information on what size mortgage you qualify for. We help you get the best deal for your loan and save money by researching various loan offers. We even negotiate with lenders on your behalf so do not overspend.

Finding the right loan is just a part of the process. A broker can also pull the buyer’s credit reports, verify their income and expenses, and coordinate all the loan paperwork. Many brokers have access to a powerful loan-pricing system, as well, which prices a mortgage loan across many lenders at one time, thereby speeding up and streamlining the process.

If you are looking to get your first home loan approved, for example, finding a mortgage broker with extensive experience working with first home loans can make the process more swift and quicker. We represent multiple lenders which gives us access to a wide array of products for you to choose from. We work with a variety of lenders, including banks, credit unions and private mortgage companies. So, if you have a less than perfect credit, are self-employed or have any other special circumstances, this extra flexibility can help you find the best fit.

Mortgages have a lot of working parts: interest rates, down payments, origination fees, points and more. And a good broker can help you understand how each of these variables work together and what makes one loan a good value compared with another.

So, what happens when you approach a lender directly?

The downside of working with a bank directly is that it can cancel out many good options available in the market. If you wanted to compare the loan rates and programs from different direct lenders, you would have to apply to each to one separately and do the evaluation yourself.

A mortgage broker also has access to more lenders and mortgage products than a bank loan officer, who is limited to the mortgages provided by the bank. A direct lender only provides you with limited options and the potential of the bank next door providing a better deal will be left unexplored.

Banks are bigger companies who do daily loan applications and there is a chance your loan will not be personalised to your needs. And if you work with a broker, it is likely you will have more human-to-human contact as the two of you work through your loan application. Why go through the difficulty of doing everything yourself while missing out on a better deal, reach out to us today and we will get your application going in no time.

Investing in real estate for beginners can really be as conceptually simple as playing Monopoly. You need to understand the fundamental factors of investing and owning real estate, and the risks related to it. Simply, to win, you buy real estate while avoiding bankruptcy and generate rental income through it so you can invest in more properties. This cycle keeps moving and you make money through it. This may seem simple, but bear in mind that “simple” does not mean “easy.” If you make a mistake, the consequences can range from minor inconveniences to major disasters.

Nowadays, a lot of modern investing is relatively hands-off. You buy a stock or a share or an index fund, hold it and let it grow for years or even decades. And while this is certainly a smart and simple way to invest, it is not the only way. For would-be investors who are attracted to a more tangible and hands-on method of investing, real estate is a popular option. Granted, it is not the easiest method and there can be a steep learning curve as you begin. But the payoffs are potentially quite lucrative, and if “becoming a real estate mogul” is on your bucket list, you must start somewhere.

We kiwis know that the way to build wealth is through investing in property and building an investor portfolio. It can also be seen as one of the most dependable ways to generate profit.

However, investing is tricky to navigate through, and requires research on the current market position on investor loans. It also requires you to have a detailed understanding of your current financial situation. If you are a beginner and want to get started with investing in real estate, to assure yourself the best chance of success it is essential to make a draft of your goals and create a plan. Investing in a rental property is a substantial financial commitment and the best results will usually come to landlords who take the time to get good advice and carefully plan before investing.

There are some important steps when buying an investment property and making money through it. The first step is to figure out what you can afford, which will give you an idea of how much deposit you need to make. Then we move on to how much you can borrow. It gives you a general idea of your target price range, so you can narrow your property search within your purchase budget. The good part about investing in a property is that lenders will also consider the probable rental income you will be getting from the investment property when calculating how much you can borrow.

The next step will be to calculate the loan and the properties purchase costs like application and valuation fees. Once you have an idea of how much the costs are going to be when investing you can move onto going through the loan options available that suit your needs. This is where speaking to a mortgage broker will really make things easier. Speaking to a mortgage broker will help work out, “How much are the banks actually willing to lend me?”. The first few steps of figuring out your deposits and costs is easy as you are aware of your financial situations. But knowing the amount you can afford does not necessarily mean the banks are going to give you the money. A mortgage broker has access to various lenders rather than just you going to your own bank, which is just 1 lender. We will help you find out, given your situation, how much can you afford to borrow. And that way, you can go into the market knowing that “Okay, I can afford to buy this much” and work towards that to find a property that fits within those areas.

Once all of this is established, finding a property, and moving ahead with the final loan approval will not take long with the help of a mortgage broker. A mortgage broker benefits you throughout the entire investing journey, you will simply need to discuss what is needed and they will deliver it. We will work things out for you from the beginning to assure that everything settles smoothly with you getting your hands on your investment property hassle free.

The first thing that comes up when you start planning to buy a house is to determine your budget. Once you have a budget in mind, the next step would be to work out the amount you would like to borrow for your first home. The amount you are able to borrow depends on several factors related to your borrowing capacity. When buying a home or a property, your borrowing capacity will affect the amount you could spend to purchase the property. These factors will improve your home loan eligibility significantly. Some of the factors which can help you maximise borrowing on your first loan are listed below.

Improve your credit score 

The simplest method to improve your credit score is to be regular with your credit card and loan payments. The interest rate offer you get on a loan depends on your credit score. Raising your credit rating insures a better interest rate, which means you will be able to borrow a higher loan amount. Good credit scores assure the lender that you will make the payments on time and can be trusted with a higher loan amount.

The easiest way to improve your credit score before applying for a home loan is by paying your bills and credit card payments on time and limiting excessive or new lines of credit. Holding too many credit enquiries on your report could lower your credit score.

Arrange a bigger deposit

The amount borrowed by a lender may depend on the deposit you make in relation to the value of the property, this is known as the loan-to-value ratio (LVR). Putting down a larger deposit amount (say around 20%) will save you from paying PMI (private mortgage insurance) and saves you a lot of money over a period of time. Bigger deposits could also reflect that the borrower can save money and make the repayments on time.

Lower your debts

It is a good idea to lower your outstanding debts or pay them off completely before applying for a home loan. If your debts are cleared or at least lowered, you could have a better chance of getting a higher loan amount from the lender.

Opt for a longer tenure loan

The normal period of a home loan extends for 25-30 years. If you opt for a longer tenure for your loan, say around 40 years, it will lower your repayment amount. Although increasing loan-term makes your repayments low, the total interest to be paid towards the loan will get higher.

Reduce unnecessary living expenses

Another method of saving money is to cut unnecessary everyday expenses. The more you spend, the lower the loan amount you would get. It is advisable to reduce spending on things that are not needed and commit that amount to your savings. Creating a budget helps here  as you could clearly track where your money is flowing, which allows you to make changes towards maximising your savings.

Organise financial records

It is essential to keep your financial paperwork up to date, especially if you are self-employed. Lenders usually check the records of your account and tax payments for at least the past 2 years. It is best to organise your financial statements before you visit a lender to apply for the mortgage.

Source additional income

Your home loan amount can be increased if you have another source of income, like earning an extra income in addition to your main job. It could be anything from getting rental income, tax refunds, side-hustle or income from doing multiple jobs.

Take joint loans

Choosing to take joint loans with your partner can help you to maximise your loan amount. A lender will consider the incomes of your partner and you, which helps in getting a higher loan amount.

Getting help from family

Using a guarantor like your parents or a family member or you can take help from the family offset mortgage. The lender will assess your guarantor’s financials and may offer you a higher loan amount. It is important to remember that in the case you are not able to make the payments, your guarantor will be liable to pay off the loan.

Use a broker

The expert mortgage brokers at Accord home loans can guide you through the loan process. Our team will help you to choose from various offers to match your requirements.