How Brokers are different to Banks

In the Australian Banking market there is a lot of competition between all the major and second tier banks and lenders. With interest rates being at historical lows and the property sector largely outperforming other investments, it is a good time to review your current financial position or consider taking the steps to enter the market.

Brokers save you time and money

At First in Finance we understand that your time is valuable, so in order to ensure that that you get the best outcome we negotiate and compare the most competitive solutions in the market and provide them to you in a format that is easy to understand. From there it is as simple as selecting an option and we can then manage the rest to save you time, and money.

We offer more variety

For us to achieve our goals, we need to make sure that you are getting quality service, products, price and results. How do we do this? Like any business, we need to have market leading offers that have the following aspects:

• Flexible Options (Fixed or variable)
• Choice of products (term loans, lines of credit and professional packages)
• A range of repayment options (Principal and interest, Interest Only, Interest in Advance)
• Can accommodate different security types (Commercial, residential, rural)
• Lend to different title types (Company, Leasehold, Strata)
• A variety of credit underwriting policies (Self-employed, companies, individuals, SMSF).
• Arrange finance for different asset classes (property, vehicles, equipment, business lending).

First in Finance have relationships with an extensive panel of lenders. Our full range of products means that whether it is a home loan, commercial loan or business loan, we have a solution to meet your needs. Can your bank do this? Talk to us now to see what difference a highly skilled professional can make to your trusted team of advisers.

How the knowledge and expertise of a broker helped Mr and Mrs Wells build wealth

Scenario

Mr & Mrs Wells come to First In Finance looking for assistance to refinance their existing home loan held with and major bank for a better interest rate, and draw on further equity to acquire their first investment property. They had done some research on the investment property market, but were not sure on what the next steps were. Mr Wells was also self-employed so he was a little unsure on what his ability to borrow was. He has operated a small to medium size landscaping business for 15 years and had 5 staff he was managing. After the initial consultation we gathered some financial information and provided the clients with some options for consideration. The income being declared in the financial statements was sufficient to support their refinance and also provide servicing for a small investment property that was yet to be determined. We suggested a loan structure that was supported by the tax guidelines, and was also going to provide them a safe option for investment. Once the review had been finalised and Mr & Mrs Wells had selected their preferred lender, an application was submitted to the bank for assessment and was subsequently conditionally approved subject only to valuations on the existing and new property that was not yet located. The valuation on the existing property come in shorter than expectation and it left the clients in a position of either putting in further deposit or paying lenders mortgage insurance. The clients were not particularly comfortable with paying interest on the capitalised mortgage insurance, so we needed to look at alternative options. The couple had some savings, but were also reluctant to use them in case they need to rely on them for other unexpected business or personal expenses.

Solution

During the assessment of their financial position we noted that Mr Well’s company had a number of assets used in the operation of his landscaping business. Some of these were financed with renewals due, and some of the other equipment was unencumbered. After ascertaining that the equipment was only a couple of years old we provided some options to use the equipment to generate some equity by gaining approval for a sale and lease back on the near new assets. After providing some quotes the clients were comfortable that it was a cost effective solution and it was not going to jeopardise their family home.

Outcome

The sale and lease back was draw down and the clients were then in a position to refinance the existing property and start to look for an investment property that met their needs. In this scenario First In Finance was able to use its experience to ensure that the clients got the best possible outcome for their situation. Having experience across a number of financial products ensures that our clients don’t need to worry about understanding the broader market and where they need to go to find different solutions.

How banks are limited in what they can provide

Whilst the banks are crucial to our business and provide a good level of service, product and price, they can be limited by the following aspects:

• One set of products to offer
• Restricted by a single credit underwriting policy or guideline
• Interest rates may not be competitive
• Lending parameters may be set or structured to certain securities and industries which change with economic factors (domestic and international)
• May not offer a specific product or policy to meet your requirements e.g. SMSF lending.

Brokers with banking experience

All directors at First In Finance have worked with either one or multiple banks, so we know their policies, criteria and credit guidelines. Having experienced all of these factors we can keep you informed and provide you the guidance when it comes to making a decision in which bank or lender is right for your specific requirements.