Should your mortgage broker be an investor too?
Hank Hong has created a sophisticated multi-property portfolio over the years, and one thing that has helped him achieve success is his background in mortgage broking.
According to him, property investors must do their best to try and find mortgage brokers and other members of their financial team who have intimate knowledge and experience on property investment.
As a mortgage broker, Hank has experienced assisting investors in understanding their goals as investors and helping them realise the ways through which they can achieve them, and being a property investor himself has made way for a more fruitful relationship between him and his clients.
“I’ve sat down with many clients and they’ve gone, ‘What’s your portfolio like?’ And I’ll sit there and explain to them, and one of my portfolio strategies might hit exactly what they’re thinking in their mind. That’s important, knowing what your client wants, and your client understands that you know what they want. That keeps them at ease, and they’ll tell you everything, and then you can open up and run through their situation for you,” he told Smart Property Investment.
Hank added: “You’re not there for advice, I’m never here for advice. I’m just here for, ‘Look, I’ve seen my client do this, this.’ Do your own research and see how you feel about it.”
Mortgage brokers also help clients with high investment rates that’s more than 12 months old, according to Hank.
Smart Property Investment’s Phil Tarrant, who is a self-proclaimed “pro-advice” investor, has personally relied on mortgage brokers to help him understand some of the technicalities of property investment.
“I can’t remember what I was doing, but I checked, I looked at (the interest rates) and I just went, ‘Hang on a second, what’s going on here?’ They were so far over what market should be. So I called my mortgage broker and said, ‘What’s going on here? This ain’t cool.’ So he got straight onto them and got the rates down,” he shared.
According to Hank: “(Mortgage brokers) either get the rates down, or he can move you. Right now, a lot of the banks are stepping back into the investment market. There are amazing fixed rates under 4 per cent, and there [are] variable rates a couple of the major—actually the non-majors, they’re under 4 per cent at the moment. Have your mortgage broker run a quick scenario for you and make sure that you’re still competitive.”
“I don’t tell people to fix rates, but it’s up to you. If you fix three to five years, under 4 per cent, I can’t see you losing. Even if it goes down once, I can see in a couple years’ time the rates are going to be higher than 4 per cent. To fix in is not a bad way, and it locks your investment down. No headache, the rent pays it, and you move on. [Whatever you want to do], speak to your mortgage broker,” he concluded.
Tune in to Hank Hong’s episode in The Smart Property Investment Show to know more about his tips on co-investing and how to build wealth through borrowing money.
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