Finance Perspectives Matrix

Dr. Darren hails from the mining town of Newman in the Pilbara and moved to Perth to complete his university studies in Veterinary Science.

With over many years’ experience in the industry, Darren has a wealth of knowledge about property investment, property finance and complex loan structuring. As a Liberty Adviser, he has access to a wide panel of lenders and a range of products, allowing him to find the best solutions.

As an avid property investor himself, Darren applies the lessons from his personal experience to achieve the maximum benefit for his customers. He thoroughly enjoys helping others with strategies to create and grow their wealth. Get in touch to have a chat about how Darren can assist you.

Loan Choices Matrix Realty

When you take out a loan, you are basically buying money. Money is a very simple commodity, which means you should be able to compare the price of loans (money) at a glance, in the same way you might compare a litre of petrol or milk. In reality, this rarely happens.

Lenders understand that it is not in their interest (pardon the pun) to embark on a rate war with each other for market share and have instead opted to attach any number of bells and whistles to loans that ultimately obscure the true cost to the borrower.

Some of these ‘bells and whistles’, such as redraw facilities, can be very convenient, even desirable. What the borrower needs to know, however, is how much they are paying for that convenience.

The financial industry has largely resisted efforts to publish the “real” interest rate on a loan and the average borrower today is pretty much confounded by the thousands of home loans on the market offered by hundreds of lenders. Not even a rocket scientist could easily calculate the best home loan in the market today without a fairly sophisticated software package or strong industry knowledge.

This obscurity, along with reduction in branch networks and strong competition for home loans, has in part been responsible for the mushrooming of the mortgage broker industry. Virtually non-existent 15 years ago, mortgage brokers now write at least 30 per cent of all loans in Australia.

In theory, the mortgage broker’s job is to be familiar with all the loans on the market so that when you enlist their services, they can find a loan that matches your circumstances and offer the best deal for you. They can save you time and money, help explain loan documents, costs and disbursements and even negotiate with the lender on your behalf.

Not all mortgage brokers, however, are working for you. Mortgage brokers make their money by receiving commissions from the lenders, which can affect their impartiality. Some have relationships with only a few lenders, which means you don’t have access to all loans on the market. Others may only offer the products of one bank. Others may simply suggest to you the loan that pays them the highest commission, not the one that gives you the best deal.

Alas, the borrower is now like the old woman who swallowed the fly and then has to swallow a spider to catch the fly: it may have been difficult calculating the cheapest interest rate, but it can be even more difficult calculating the independence or honesty of a broker.