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16th February 2015, 11:48 PM
#1
Risks in switching mortgage broker, or shopping around, after a home loan is approved
Hi all,
I am in the process of buying my first house in Auckland. After many property viewings and negotiations, I have finally got my offer accepted. The vendor suggested a mortgage broker, MB1 (fictitious name) who is a from a well known financial services company in south Auckland. I approached her and she got my loan approved from AMZ in less than 2 days. However when I asked her if she approached or checked with other banks too, I didn't get a convincing answer. I looked up their company website, and it seems they only deal with AMZ. The conditions in loan approved from AMZ, are quite standard ones and even includes a loan application fee of $500 apart from a low equity premium of almost $3000. I calculated the floating interest from the indicated repayment amount in their letter, and it is about 6.7%. I am really doubtful that MB1 processed my loan application with any other bank.
I have now approached another mortgage broker, say MB2 (recommended by a colleague). MB2 has assured me that she will approach all the major lenders for my loan, including the ones who don't deal with brokers. She will later present me with the bank offers and I can chose to go with one or not. I will have to pay her a fee only if I go with a bank which doesn't pay her a commission. I will have to sign a letter to authorize her, to negotiate/discuss a home loan with lenders on my behalf. The problem is that she told me she will approach AMZ bank too (apart from other banks) to renegotiate the loan. I called up the bank's customer care, and I was advised that if they are approached regarding to my loan application again, it will be considered as fresh application and will be processed as per the bank's current policies/terms. My approve loan will become invalid, my other broker will be informed about the change of broker and the loan. According to them, it is unlikely that I will get a better loan deal as result of re-negotiation.
My offer is already unconditional now, with the settlement date about 5 weeks later. I am not sure how much risk it is to approach another mortgage broker at this moment. I also think that AMZ or MB1 has definitely given me a very standard home loan, with all kind of conditions (they didn't even bother to waive off the loan application fee).
Has anybody had any experience of shopping around for home loan, or switching mortgage broker after a home loan is approved and/or offer is unconditional? Please advise. Any thought/tip is welcome. Thanks a ton!!
Last edited by dothers; 17th February 2015 at 12:03 AM.
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