Why cheapest is not always the best

By Graeme Salt

Nobody likes overpaying on their mortgage, but this week showed why the cheapest option is not always the best.

This week a client bought a $2m property in complicated circumstances.  But most importantly, while it was complicated, the clients have moved into the new home and are very happy!

The loan was complicated as I am based in Sydney, the client is in Melbourne and the bank’s settlement team is based in Perth.

But, the really complex issue was that the clients’ parents were acting as guarantor on the loan – which involved a whole heap of extra legal documentation.

For various reasons, the legal documents arrived very late.  In fact, we only had three days for the clients to go through them with their solicitor, sign them and get them back to the bank.

Thankfully, the bank was very flexible so that the clients can move into their home on time – and not face penalty payments.  We knew we were on a really tight timetable so developed a plan-of-action with the bank in advance:

• On the Friday, the guarantors signed the documents with their solicitor – who then duly certified the documents
• I got the pdfs of the certified documents to the bank’s legal team who could go about preparing for settlement on the understanding the originals were on the way
• The clients Express Posted the original from Melbourne to Perth
• On the Monday, the originals arrived and we worked with the bank so they could confirm they were ready to advance $1.5m for the purchase.
• On Tuesday at 12.30 the clients settled on their home on time and got the keys to the new house.

The bank we used this time was Bankwest – right now, they may not be the very cheapest – but, over the lifetime of the clients’ loan, they are always going to be one of the most competitive.

Most importantly, the clients are happy.  Cheapest isn’t always best and it’s important to find a bank with whom you can work.

Graeme Salt is an award-winning mortgage broker.  For a no-obligations consultation on your home loan needs, please contact him on 02 9922 5055