Navigating the home buying process or securing a loan can be complex and overwhelming, especially with the variety of options and products available. This is where a mortgage advisor comes in—a professional who guides you through the process, ensures you get the best deal from lenders, and helps structure your loan to align with your financial goals. But what exactly does a mortgage advisor do, and why should you consider using one? Here’s a comprehensive guide to understanding the role and benefits of working with a mortgage advisor.
The Role of a Mortgage Advisor
A mortgage advisor’s primary role is to support you in securing a mortgage that best suits your needs. Whether you’re a first-time homebuyer, selling your current home to purchase another, or looking to invest in property, a mortgage advisor acts as your advocate and expert guide throughout the process.
Mortgage advisors work with a range of lenders to find the best loan products for their clients. They help you understand the various options available, from fixed-rate to variable-rate mortgages, and advise on the best structure for your loan based on your financial situation and goals. They also ensure that the loan terms align with your future plans, whether that means a long-term fixed rate for stability or a shorter-term product for flexibility.
How a Mortgage Advisor Supports Different Types of Buyers
1. First-Time Homebuyers
For first-time homebuyers, the mortgage process can be particularly daunting. A mortgage advisor walks you through every step, from securing pre-approval to finalising the loan. They connect you with essential professionals such as solicitors and valuers, and provide advice on choosing the right property and making an offer. Their expertise helps simplify the process, making your first home purchase as smooth as possible.
2. Current Homeowners
If you’re selling your existing home and buying a new one, a mortgage advisor can help you navigate the additional complexities involved. This might include coordinating the sale and purchase timelines, advising on bridging finance, or helping you restructure your loan for the new property. While you may have been through the buying process before, a mortgage advisor ensures that you consider all the new factors that come into play when upgrading or downsizing.
3. Property Investors
For those looking to invest in property, a mortgage advisor provides invaluable insights into leveraging existing home equity, structuring loans for investment properties, and maximising tax benefits. They help you secure the necessary funding while ensuring that your investment strategy aligns with your financial objectives. This might also involve advising on whether to go interest-only or choose a different loan structure based on your investment goals.
4. Using Equity for Other Purposes
Beyond property purchases, a mortgage advisor can help you use the equity in your home for other purposes, such as renovations, buying a new vehicle, or even investing in a business. They work to get you the best deal from lenders and ensure that the loan is structured in a way that supports your broader financial goals.
How Mortgage Advisors Get Paid
A common question is how mortgage advisors get paid for their services. In most cases, mortgage advisors in New Zealand are paid a commission by the lender when a loan is successfully arranged. This commission typically does not affect the cost of your loan or the interest rates you receive. Importantly, mortgage advisors are expected to act in your best interests, providing unbiased advice and ensuring that the loan they recommend is the best option for your situation.
While the commission model is standard, some mortgage advisors may also charge a fee for their services, especially for more complex cases or when dealing with non-standard lending products. It’s always a good idea to discuss fees and commissions upfront so you understand how your advisor is compensated.
Why Use a Mortgage Advisor?
The benefits of using a mortgage advisor are numerous:
Expert Guidance: Mortgage advisors understand the intricacies of the lending market and can offer tailored advice that suits your specific situation.
Access to Multiple Lenders: Instead of being limited to the products of a single bank, mortgage advisors have access to a wide range of lenders and products, increasing your chances of finding the best deal.
Time Savings: Mortgage advisors handle the legwork of comparing loan options, liaising with lenders, and managing the application process, saving you significant time and effort.
Personalised Service: Advisors take the time to understand your financial goals and help you structure your loan accordingly. They offer ongoing support throughout the life of your loan, advising on refixes, refinancing, and other financial decisions as needed.
Conclusion: Making the Most of Mortgage Advice
In New Zealand, over 60% of home loans are now arranged through mortgage advisors, reflecting the value they provide to borrowers. Whether you’re a first-time buyer, a seasoned property investor, or someone looking to use their home equity in new ways, a mortgage advisor can offer expert guidance, access to a broader range of loan products, and personalised support throughout the lending process.
If you’ve never used a mortgage advisor before, now might be the perfect time to explore the benefits. At My Mortgage, we’re committed to helping you achieve your property goals with the best possible financial advice. Contact us today to discuss your needs or to learn more about how we can support you on your property journey.