When taking the plunge into the world of home loans and property investment, the challenge often lies in knowing which expert to approach for help.
Brokers and financial planners, although similar in their professional outlook, cater to different financial endeavours.
Brokers that deal in home loans must be qualified and licensed loan advisers with in-depth knowledge of home loans and options suitable for a range of different financial situations.
They negotiate with lenders to arrange loans and help manage the process through to settlement.
When it comes to talking about debt structure or interest rates, or the best way to set up a loan, then a mortgage broker is qualified to give that credit advice.
Options relating to loans and refinancing can only be recommended by qualified brokers.
First they’ll talk to the client about their goals. This might be to pay off the loan as quickly as possible, or to find a loan with the lowest interest rate. They may want a loan with a fixed term, or a low-fee structure.
If the borrower has no specific requirements, finance brokers will most often take into account interest rates, how fees impact the life of the loan and how portable the loan is.
While interest rates are the most critical factor, they’re not the only factor. As well as the loan’s fees and interest rates, the lender must also match the client.
In contrast, financial planners assist with anticipating and managing longstanding financial outlooks. They help sort through and select options for investment and insurance, with attention paid to retirement planning, estate planning and investment analysis.
Planners take care of more of the long-term, wealth-creation strategy, as well as super and life insurance, and other wealth protection insurances. A financial planner’s work is wide-reaching and very important to your long-term financial health and stability.
There are some situations where it’s best to include both types of financial professionals. For instance, if your broker is helping you refinance your loans in order to undertake a financial investment, a financial planner can help assess the best investment option for you.
A good mortgage broker will refer back to their client’s financial planner to make sure it fits their broader long-term wealth goals.
It depends on your situation - for loans, see a broker, for investment advice, a financial planner. Of course, your mortgage broker can always refer you to a planner if you need one.
Olympia Andronicos is a credit representative (507463) of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237). Choice Finance Specialists 0418 690 628.