It’s not the fault of the banks or brokers it’s your fault!! That’s right, it’s the fault of the consumers. (shock horror the customer is not always right?)

Now that you are looking at getting a loan whether it be for a house, your business or investment purposes, you are being inundated by quotes of interest rates, comparison rates, true rates, promises of low fees, no fees, free valuations, no application fees, people promising to share their commissions with you, people even offering to pay you to do business with them.

You are faced with slogans like we will beat every price in the market, slogans like why not? No waiting in lines, who will hold the door open for you, blah blah and these seem endless, meaningless and deceiving!

Because the terms of lending seem complex and very hard to understand, the customer has resorted to the lowest common denominator which they understand - cheap. Therefore applying this logic to the lending market has got to make sense or does it?

When you go and ask for cheap rates, no fees and the person to pay you all their commission for giving them your business, that’s got to be a good thing right? WRONG! You get what you pay for;

It is not reasonable to expect something for nothing in any part of life, especially when dealing with money. So why do you expect the unreasonable from people who are suppose to help guide you with which loan products suit your needs?

So what do you do?

Stop trying to apply logic you use whilst bartering at a market when wanting financial or lending assistance.

Bank or Broker?

If you go to a bank (any bank), they will only offer you their own products irrelevant if they are the least competitive in the market or whether they are totally tailored to suit your needs.

If you go to a broker (randomly and one which is not referred) you may be setting yourself up for unnecessary fees and charges and once again, a solution which may not be tailored to you.

If you belong to an association, club, have family or friends who love their broker, or have an employer who is able to provide you a recommendation to a lending broker that’s who you use.

How do you know whether your broker is good?

They don’t try to wow you with cheap interest rates, no fees or price.

• All brokers have access to similar lenders and loans it’s their understanding of your needs and the tailoring of a correct solution which is more important.

They don’t spend the whole time speaking about their previous lives where they use to be very senior Bank Managers.

• Ex Bank Managers usually make terrible brokers because they still have a tendency to put you with the bank they use to work for.
• Ex Bank Managers have had decades of training on how to be judgemental (as a bank manager should be) rather than working with you to achieve your lending objectives.

They spend most of the time telling you the solution is refinancing your existing home to consolidate your debts, or attaching a line of credit to your equity, before you have even had a chance to explain your needs.

They are too busy giving you cheap interest rates and no fees rather than trying to understand your objectives and seeing what outcomes you are attempting to achieve.

They are full time lending brokers and part of an organisation which has support, offices and staff.

• Impossible for them to be experts of their industry part time.

They do not get remunerated differently according to what loan or lender they persuade you to accept

• Thereby not ensuring their focus is on your benefit rather than their commissions.

Look for a Lending Consultant who is a true professional, part of a professional organisation and comes to you highly recommended. Financial and lending solutions should not be sold to you as being cheap, low interest, no fees or special introductory prices which are designed to do you a favour. Finances are a tool which is to be used to help you achieve your financial, lifestyle and wealth creation objectives! Not cheap steak knives.

Harry Pontikis is the Director of Chocolate Home Loans. Harry leads a team mortgage brokers who specialise in home loans, business loans and commercial loans Australia wide.

This entry was posted on Saturday, February 13th, 2010 at 9:18 am and is filed under Articles, Monthly Loan Specials . You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.