Adviser insight: It's not all about rate
Property investment is quickly becoming one of the most popular means of building wealth across New Zealand. Maybe it's the huge growth we've seen in Auckland and the surrounding towns, perhaps it's the incredibly low interest rates making mortgage servicing that much easier - there's certainly no lack of reasons to start looking into the venture.
Whatever the reason, Kiwis all over Aotearoa are choosing to put their capital into bricks and mortar - but are they getting the right advice to make the most of this new direction? We spoke to Mortgage Adviser Matthew van Geest for his take on how a mortgage broker can make your property investment work for you.
Taking a load off
While property owners will understand the basics of home loans due to previous commitments, the fact is that real estate investment is a different beast entirely. Rather than trying to handle the entire process yourself, a mortgage broker can streamline it and make the experience that much easier to understand.
"The differences and nuances between the banks is like being in a washing machine - it can be completely confusing. It's our job to understand that, and to make it work for a client," Matthew explains.
"A good broker will know how to get the combination of banks and structure right, which can often be the difference between a client being able to purchase more property instead of not being able to obtain finance."
And the role of an adviser doesn't just stop there. Property investors will deal with a whole cavalcade of other financial professionals too: lawyers, planners and accountants, just to name a few. Brokers are able to make life easier here as well, acting as facilitators between the various groups.
"Accountants are always tax-focused and lawyers are often asset-protection focused. As brokers, we can work with both and make sure the set-up is right," says Matthew.
Usually it's the advice and service that clients value most once they have dealt with us.
The power of advice
Matthew explains that, despite popular thought, a great deal of the role of a mortgage broker has more to do with strategising than dealing solely with interest rates. While that is certainly a part of the job, with brokers able to negotiate on the behalf of their clients, it is the more holistic advice that holds the true value.
"Clients often initially approach us looking for the best rates and offers. Squirrel settles between $60 to $80 million with the banks each month, which gives us strong negotiation power and we know what's best in the market. We save a lot of time so the client doesn't have to go back and forth between banks," Matthew explains.
"It's really not all about rate though, and usually it's the advice and service that clients value most once they have dealt with us."
The support offered by advisers isn't just number-crunching. It includes everything from learning which properties are likely to get funded to knowing which lenders are more attractive based on your current financial situation. Matthew describes how many clients come in with a particular mindset as to what advisers are capable of doing for them, and come away surprised with the breadth of service they actually received.
Ultimately, having a mortgage adviser on your side doesn't just mean you have somebody negotiating interest rates for you. You have a strategist, a facilitator and a broker all rolled into one - exactly what you need when you want to get involved in property investment.
If that sounds like the kind of person you want on your team, make sure you get in touch with the crew at Squirrel - we're not just about rate!