Expert advice equals serious savings

Having a mortgage expert can be the key to getting your finances over the line and may save you thousands in interest and fees.

When Nathan was offered the opportunity to purchase his mother's property in Tasmania at a favorable price – just $180,000 for a house worth $350,000 – he wanted to take the opportunity to consolidate other debts. Using the equity in his property, he applied to refinance to cover the obligations and the favorable purchase, expecting to have all the loose ends tied up relatively quickly.

This was not the case. When Nathan was tired of waiting for the bank to sort out the valuation on the Tasmanian property and decide whether it would approve the loan, he visited a Mortgage and Finance Association of Australia (MFAA) approved finance broker.

"He said it was taking forever, so he came to see me," says Nathan's finance broker.

Based on the little information he had gleaned during his original application, where questions were raised about the loan-to-valuation ratio, Nathan walked into his new finance broker's office, assuming that he would need to apply to a specialist lender.

"After doing a credit check and looking at the figures, serviceability, and the rest, I couldn't see any reason to go to a specialist lender. His credit checks came up clean, so I put it to a prime lender," says Nathan's finance broker, "I chose a lender and product I knew quite well. The product is one of the cheapest in the market and doesn't have annual fees, and I knew I could order upfront valuations with the lender. When the valuation stacked up, we knew we had something that we could do."

The loan was settled, and Nathan could consolidate his debts and purchase the property from his mother.

"He was happy to go and pay a higher interest rate to a specialist lender," says his finance broker, "It would have been at least one full percent higher in interest."