What questions should you be asking your mortgage broker?
Paul: Well, good day, guys, it’s Paul Glossop here again from Pure Property Investments. So this is our part of our educational series. Today I’m joined by Aaron Christie-David. Aaron Christie-David is a Mortgage Broker who specializes in investment property loans, amongst other things. So thanks very much for coming in today to share your knowledge and wealth of wisdom. What we wanted to cover today, if it’s okay with you, is probably some of the fundamental aspects of property investment when it comes to financing properties, well investment properties in general, questions that your clients ask you, the general questions, and probably more importantly, what questions should clients be asking you and, generally, their broker when looking at structuring or getting into an investment property. Aaron: Yeah, great. A lot of that really depends on the level of experience a client’s had with purchasing investment property and especially getting into their first investment property. A lot of common questions I get is, “How much deposit do I really need and then what does that mean for mortgage insurance and associated costs?” That’s a common question I get. The next is around the loan structure, so interest only versus principal and interest, and which one’s their preferred loan structure, which is super-important and I get that quite often, which is great. The ones that I don’t really get a lot of is the associated costs that do come with purchasing investment property, which is the label costs, the statutes, the bank charges, and I think clients are a little bit blindsided by it when they get all these charges when we go through the loan process. So, ideally, that’s why I try to pre-position them up front, what their costs are going to be, as well. And the next step, really, is more surrounding their exit strategy. Clients haven’t really thought through, you have getting into the investment property, but then, what are my costs coming out of it, as well. And a big one of those is capital gains tax, for example, or ongoing holding costs, and I think having not been through the process as an investor, it’s not really their fault that they don’t know those questions. What they don’t know is what they don’t know, but that’s our job, and that’s really my job, to kind of navigate them through those, I guess, those areas where they might get a little bit blindsided during the process. Paul: There’s some good points there, and I think ultimately it’s a minefield, it’s a trap for young buyers when it comes down to it. If you don’t know it, you just don’t know it, and there’s a lot of fine print that goes into every document that someone has to sign from buying investment property, from a Buyers Agency Agreement through to bank documents, through to conveyances documents, property management. There’s a lot of documents in there and a lot of the times we’re told what’s in those documents, but we truly are only told what we’re told, and sometimes we don’t go through the Ts and Cs the way we probably… Personally, I don’t do it either, but if you’ve got the right people in place, hopefully they’re telling you, like you said, what you need to know both on the in-going and on the out-going. There’s some very, very astute advice there, so I hope you guys enjoyed that. And if you do need to get in touch with Aaron, his information will be at the bottom of the screen right now, as well. So thanks, guys, and I will see you soon.