Q) Hi Paul, I have just purchased my 3rd property and my mortgage broker is struggling to get my loan approved. Why?
A) I'd need to have more details to answer this specifically for you, but I will highlight why so many mortgage brokers have 'no idea' when it comes to investment lending or what I like to call 'mortgage planning'.
Most people never qualify who they are getting their loans from. Be very careful when choosing which lender or mortgage broker to borrow from these days as I believe that 95% of them have 'no idea' when it comes to planning mortgages.
When I recently qualified over 100 staff/owners from banks, non-banks, non-conforming lenders or mortgage brokers, only 2 had more than 5 properties personally, and only 5 had over 50 clients with 5 or more properties.
Is everyone seeing a pattern here? Brokers are normally broke, so how are they going to plan you mortgages, especially when you get past 3 properties - if they are not doing it themselves ?
Next time you need a loan, ask these questions to your mortgage broker:
• How many properties do you have?
• How many clients do you have that have more that 5 properties?
• Can I have the name of 5 of those clients to confirm this?
• What structure should I buy in (P/L, Trust, own name)
• Should I buy in 1 or 2 names?
• Should I cross-collateralise my properties?
• Which lender are you using?
• Which mortgage insurer are you using (GE, PMI or Self insured)
• What LVR should I have?
• Should I go full doc or low doc?
When asking these questions to your mortgage broker, monitor his/her reactions. If they are guarded with their questions or can't answer them, you have your answer. Investors really need to find Mortgage Planners these days.
Mortgage Brokers just can't compete when you compare them to mortgage planners.
Mortgage Planners have properties, deal with property investors and have the skills and knowledge to place the loan at the correct lender first time every time.
Paul's Tip: Investors need a dream team around them to ensure they are protected and advised correctly. Mortgage Planners should be part of your dream team as it is one of the most important aspects of property investment.
Source: "Ask Paul" which is a regular feature provided for Your Investment Property Magazine by Property Secrets where you can ask Paul for his thoughts on any of your property investment queries.