How to broker the right deal for you
By Maria Thackwell
Right now, the Christchurch mortgage market is volatile, it is challenging and there is a huge amount of misinformation and misunderstanding around what is going on… but there is also great potential for striking excellent deals.
What is presented as fact one day, might well be superseded by conflicting information the next.
Buying a home is usually the biggest financial transaction people will make. It makes good sense to get professional assistance when attempting to secure the best deal.
The mayhem and chaos post-quake has made it difficult to filter so much changing information, particularly when people are living in constrained circumstances and coping with so many other issues.
That’s where the services of an objective mortgage broker can provide peace of mind and more importantly, clinch deals that might not be possible by going directly to a bank.
Mortgage brokers work across the entire banking sector, providing up to the minute knowledge of what is on offer, what the banks require and how to present the best case for securing finance.
For residents in eastern Christchurch, the situation is particularly difficult and although many banks are struggling to determine standard policies around loaning against TC2 and TC3 land, the good news is banks are currently considering applications on a case-by-case basis.
I am aware of banks saying no just because the applicant is in the too hard basket. Brokers are able to break down the barriers, offer the best advice, get the best deals and simplify the process. I am also aware of clients going directly to banks, working through the huge mortgage application process and submitting all their personal information.
After this hard work, they are told their application is being declined because the bank is not comfortable with their security.
I have worked closely with a client whose home was red stickered in the September 2010 quake, was damaged beyond repair in February 2011 and in October this year her home was demolished, leaving her with a badly damaged section zoned TC3.
In September 2010 she spent six weeks residing in a caravan, waiting for a rental property to come up and now like many others, she is assessing options for her housing rebuild. She has had a full payout on her home and has bought another section. She wants to use the equity in her TC3 section for her new home.
Knowledge is power. Two years dealing with the challenges of clients going from a repair to a rebuild, dealing with EQC, working alongside financial institutions that are struggling to stay ahead of changes, along with numerous insurance and earthquake specialists, has created a challenging financial environment for home buyers – and I work in the business all day every day. There is huge competition between banks at present and many are offering ‘special deals’ that look great on first glance.
However, it is important to see beyond the smoke and mirrors; that instant gratification offer may be worth a whole lot less in the long term in comparison to a percentage drop in interest.
A broker will take into account the alignments between banks and insurance providers and provide an independent comparison of deals on offer. In a single appointment a broker can provide more information than a full day spent visiting individual banks, and can negotiate and secure better rates than a client could potentially achieve directly.
They are formidable advocates when it comes to securing the best possible deals. Perhaps the biggest advantage of all is that in almost all cases brokers’ fees are paid for by the banks so the service is free to clients.
Currently, securing mortgage deals requires a lot of work, but I anticipate the situation will change again in the not too distant future.
Right now banks do not have a firm policy on how to deal with TC2 and TC3 land, but that is potentially very good, as the banks are dealing with each situation on a case-by-case basis and are open to discussing options.
In order to give yourself the very best chance of securing the very best deal, seek independent professional advice, don’t take no for an answer and don’t be daunted by the prospect of change.