Q&A With A Mortgage Broker
Buying or selling a home is a serious investment – not just a financial investment, but an investment in time and emotions too.
We recently sat down with mortgage broker Andrew Searle, Company Director at Searle Financial Group. He’s a 17-year veteran of the industry who’s worked in Sydney, the Gold Coast, Japan, the UK and returned to his birthplace of Toowoomba to start his own business.
Q. What are some of the biggest changes you’ve seen in the financial industry?
Well, there’s now a lot more government regulation. This started creeping in around 10 years ago. The government forced the banks to be much stricter about the ways in which they accept or reject an applicant to borrow money. We’re seeing the benefits of those regulations coming through now, where we find that people will be less likely to default on a loan because the banks are a lot stricter about how they assess living expenses and income.
The other big change in recent years is interest rates. When I first got into the industry 17 years ago, interest rates were about 7.5% and now they are falling fast – we’re seeing fixed rates as low as 2.3% and variable rates at around 3%. But a lot of the banks haven’t passed on the latest rate cuts yet, so you’ll probably find that those rates will continue to drop.
Q. What do buyers need to do before purchasing property?
Before they start, buyers need to speak to someone about whether the banks or other lenders will lend them the money they need to buy a property at the purchase price they want. Otherwise, they’re just wasting everyone’s time – including their own.
As a mortgage broker, the first question I usually get is: what’s my borrowing power?
At Searle Financial Group we have three mortgage brokers with a combined total of 50 years’ experience in the industry. The idea is to give our clients choice. We deal with 35 different banks and lenders here, so we know which ones are dangling a carrot and offering a cheap rate with potentially no set-up costs and no ongoing fees.
But if they go with a mortgage broker, buyers also need to know whether their brokers charge a fee.
For our company the answer is no – we get paid a commission and the fact that the banks pay us a commission doesn’t change the buyer’s interest rate, the cost of their mortgage or any ongoing costs.
I am often asked by clients whether pre-approval is necessary before they go to contract. In some cases, yes, but in many cases, no.
Q. What’s your take on the current property market in Toowoomba, especially in light of recent rate cuts and Covid-19?
The Toowoomba property market isn’t overpriced, we’ve had good steady growth over the past decade. We haven’t had the peaks of 100% growth in seven years like Sydney and Melbourne, and those markets are probably going to be under more pressure.
I think the market will remain relatively buoyant because loans are affordable and the banks are going to allow repayment freezes. Once this current crisis passes, people will be re-employed and it will be business as usual, based on the information we know right now.
Interestingly, during the GFC, the Toowoomba economy was relatively immune to what was happening internationally as well as down in Brisbane, Sydney and Melbourne, where unemployment was very high. In Toowoomba, unemployment remained relatively low because we’ve got a diverse range of industries that were not affected by what was happening overseas.
The main drivers for our local economy are healthcare, education, agriculture and mining, so those industries – and the mining industry especially – did very well during the GFC. People held their jobs here, they weren’t defaulting on their loans and there were very few repossessions.
Hopefully during these challenging times, the same will apply.
Q. What are some of the biggest benefits for people buying property in Toowoomba?
The benefits of buying here reflect the reasons that my family and I decided to relocate to Toowoomba from the Gold Coast. We have good schools, good hospitals, an affordable cost of living and affordable housing. It’s a community and people are so friendly. Also, there’s no pollution or traffic issues. Overall, people are just happier in Toowoomba.
Local people sometimes don’t see that. But I spent 20 years away and lived in so many different places around Australia and the world, which means I can recognise that there’s real value here for families – and there are lots of positives as a buyer.
I really enjoy running a family business in a family-friendly city.
Thanks for talking to us Andrew!
Find out more about Searle Financial Group at their website.
Toowoomba is the perfect place to buy! Mixing the laid-back lifestyle of a country town with the full range of amenities of a big city, there’s so much to love about Toowoomba. Whether you’re looking to buy or sell, get help from the people who know this city best – contact an experienced local agent today.