Page 16 - Smart Money

Smart Money

Each bank has a different lending policy. Despite offering an amazing
interest rate, that bank’s policy might not suit your particular
requirements and situation, and you might be better off with another
lender; you are not going to know that because you don’t know the
details of their lending policies. You could also find yourself in a credit
trap, and end up borrowing too much money. Yes, the bank will offer
you the maximum you can afford, but that may be more than you are
comfortable borrowing. That is great for the bank, but it is not great for
you, and not good for your credit score, either.

Key Point

It comes down to structure, and this makes a difference. There are a lot

of things you can do initially to control your financial future, but there is

also some bad advice out there, even in the banks. Better to deal with a
team of people that you trust, who are unbiased, and who will give you
professional information.

Often clients will go to the bank and speak to a staff member who doesn’t
actually have any lending experience. The staff member tells them they
should be able to borrow a certain amount of money without taking all
the necessary details. Based on this information, the client puts in an offer
on a house. When they go back to the bank to get their approval, they
are told that they don’t fit the policy. They have been given the wrong
information to begin with.
If you go to a mortgage broker first, we are obliged to take all your
information and do the research for you prior to telling you that you can
borrow money. We also have a duty of care; we have to make sure that we
are putting you into the right product and not leading you up the garden
path.

A lot of people, faced with the huge decision of buying a house or an
investment property, just decide to do it on a whim or without sufficient
information. They just talk to a bank staff member, because they are not
aware of the options available to them. They have a loyalty to their bank.

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