Over the years and months of this blog, I have discussed a lot about becoming mortgage free.
So now you know what you should be doing.
When setting up your home loans, one of the most important decisions you will make is deciding how to implement these steps, starting with getting the right home loan, setting it up correctly, and reviewing it regularly.
To do this most effectively, you need a trusted advisor.
Find a trusted advisor
The way I see it, the answer comes down to two things:
- Trust — in whose interest is it that you pay your home loan off fast?
- Competence — who knows how to do it properly?
When it comes down to it, I trust people whose own success relies on helping me succeed. It may be a tough way of looking at things, but I don’t assume my bank or any other business is going to help me out just because they like me.
People act in their own self-interests, so I want the help of people whose self-interest matches my goals.
After all, you have three choices:
Choice 1 – do it all yourself
Despite all the ads you see about how much your bank or Mortgage Broker cares about you, no one is more invested in you becoming mortgage free than you are.
Having read this book you should have a good idea of what you need to do and how to compare loans and set things up to best suit you. There is a lot of work and there is a lot to research – but it is an option if you have the desire and spare time.
Choice 2 – go to your current bank or lender
Unfortunately the way the bank makes money is at odds with your goal of becoming mortgage free. The longer you are in your home loan and the higher the interest and fees you pay, the more profitable they are.
I’m not saying your Bank Manager or Mobile Lender is out to get you, but the system doesn’t entice them to act in your best interests.
They can only offer their own loans and if a cheaper loan becomes available with another lender, they simply don’t want you to change to it.
Choice 3 – use a professional mortgage broker
A Mortgage Broker is most closely aligned with your goal of becoming mortgage free than your bank is and brokers have expertise across a range of lender’s loans.
To be clear, a broker is paid a standard fee by the bank for organising your home loan, so their service comes at no additional cost to you. You might think this must cost you more. However, in reality, the bank is going to pay someone for organising your loan, be it their own staff or an external Mortgage Broker.
Unlike your Bank, a Mortgage Broker has an incentive to ensure you know about new, cheaper loans that are suitable for you from other lenders, because then they are paid the standard fee by the new lender.
Additionally, most Mortgage Brokers don’t have anywhere near the advertising budget of even a small lending institution, so they rely heavily on happy customers referring them to their friends and family. There is no greater endorsement than a client who says to their friends “Our Mortgage Broker helped us become mortgage free years earlier than we would have without them.”
I think, unfortunately, that many Mortgage Brokers tend to be focused on the immediate task of getting you a good home loan right now rather than the long term goal of your financial independence. They are more about the sprint than the marathon. In my opinion, a ‘set and forget’ service doesn’t cut it anymore.
Key Point: Lenders offer new products and specials regularly, but they don’t often pass these onto existing customers.
Be sure to choose a Mortgage Broker whose stated goal is to work with you as a lifetime client and to provide resources and assistance with the ultimate goal of your mortgage freedom.
I’m surprised more Mortgage Brokers don’t do this. By helping you become mortgage free sooner, they profit from helping you with borrowing for wealth creation, particularly with investment properties and other assets. It is in the broker’s interests for you to get low cost loans and buy investment properties that perform well.
The more successful investment properties you accumulate, the better it is for the Mortgage Broker. It means more loans for them to organise and more happy customers talking about them.
As with any service industry, there are good and not so good providers, but I think any reputable Mortgage Broker that you are comfortable working with, and who focuses on you as a lifetime client, is the best choice.