As Kiwis we are great at D.I.Y. However, just because you can fix a hole in the wall does not automatically mean you’ll be good at structuring a huge mortgage debt, let alone convincing a bank to lend to you in the first place.

We live in an age of increasing regulation and when you mix “regulation” and “banking” it invariably means that rules get tightened and lending is harder to get. It is a common misconception that banks exist to hand out money. The fact is they have already handed out a lot of money and their primary driver, especially in times of uncertainly, is to manage the risk of the money they have already approved way more than worrying about handing out more. You and I believe that getting that perfect house is the most important thing in the world, the bank does not.

So, the first reason you should care about getting advice is simply to obtain a mortgage from someone who is willing to lend it to you. What does not work is going to bank after bank. You go to bank number 1 and apply for a loan, the first thing that happens is a Credit Check, you go to bank number 2 and they do the same. The second bank sees you have already been to another bank and this means one of two things – bank number 1 has declined to loan to you or, they’ve approved you and you are going to play them off against each other. Adding to this, the Credit System sees you have applied for a large amount of lending – twice - and this negatively impacts your Credit Score.  

The second reason you should care about financial advice is loan structure. If you were in the business of lending money, would you want to be coaching people borrowing from you how to pay the least amount of interest? Of course you wouldn’t, but that is exactly the position you are in as a borrower when it comes to defaulting to the standard lending facility the bank offers, or even when you re-fix directly with them.

Above are just two of the (simple) reasons why financial advice is important when it comes to getting - and structuring - a mortgage. Don’t make the mistake of thinking that you can do a good job yourself just because we all grow up surrounded by bank advertising.

As Mortgage Advisers, we are here to help – no matter how big or small the deal.