Why you need to exercise caution in a low-rate environment

“It’s been a very, very busy start to the year. I employed a full-time parabroker that started at the beginning of the year, and I am so glad I employed her when I did, because we’ve literally started mid-January and just have not stopped. 

“It’s great that investors are coming back to the market after a bit of a hiatus last year,” Ms Cannon said. 

However, as inviting as the current market is, Ms Cannon flagged that processes are still fairly complicated. 

In fact, while rates are at record lows, deals are taking a prolonged time to get across the line, sometimes upwards of a couple of months, due to fairly strict lending compliance requirements.

Her advice to borrowers is to seek a pre-approval. 

While this step could prolong the time required to acquire finance, it’s time worth spending, Ms Cannon said. 

“Customers who do have their pre-approvals, who are ready to go, they’re more confident in their negotiating and they know exactly where they stand in terms of the price range that they can go for and the rental returns that they need in order to be able to get the margins that they’re wanting,” she explained.

Additionally, Ms Cannon recommended working with a mortgage broker.

“A mortgage broker has to act in the best interests of that customer. Whereas if you go into a branch, they are not obliged to fall under that legislation.

“So, it’s a different assessment criteria from a branch lender compared to a mortgage broker. And I believe that is a positive thing for the mortgage broking market, because there’s a lot more assessment that goes into it in decisions for making the choice for our customers,” Ms Cannon said. 

After all, she noted, the most suitable deal doesn’t always come from the big four banks.

“That’s the beauty of a broker – we’ve got over 50 lenders on our panel and we used 25 of those lenders in the last 12 months, and we really research all those lenders. If we need to get a pre-approval fully assessed within a week, we’ve got a suite of lenders that can actually do that. 

“They’re not the majors and they may not be a brand that people are familiar with, but they’re still solid and safe lenders that can give competitive rates and quick turnaround times. And that’s the key,” Ms Cannon concluded. 

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