Whether you are buying a property for the first time, looking to upgrade your home or purchase an investment property, you might be wondering if you should use a Mortgage Broker or go to a bank directly.
Both avenues offer their own unique advantages, so here are some considerations to help you make the choice:
A Mortgage Broker is a home loan specialist who acts as the intermediary between a borrower and a lender. With access to a panel of multiple lenders, brokers can research and identify the most suitable home loan product for a borrower’s given position. With 68% of all residential loans now being written by Mortgage Brokers, more and more Australians are turning to brokers to navigate the complex world of the lending market.
In addition to identifying and comparing lending products, brokers also play the key role in educating and determining the borrowing capacity of borrowers as well as handle the time-consuming paperwork relating to the loan application. Furthermore, once a loan settles a broker then performs the important role of ensuring you continue to have a competitive deal while also assisting you with any future lending needs.
Typically, most Mortgage Brokers won’t charge any fees to borrowers. Brokers are remunerated by the lender through commission earned after the loan settles.
Benefits of using a Mortgage Broker:
- Provide guidance to borrowers through calculating borrowing power and guiding you through the important stages of the purchase process
- Offer a broad product range
- Identify the most suitable lending solution, resulting in fewer applications and a stronger credit score
- Project manage and process the entire loan application
- Have a single point of contact throughout the entire process, no matter which lender you apply to
- Review your home loan post settlement, answer any future questions and ensure your deal is still competitive
- There is no additional cost to the borrower
Direct to the Bank
Going direct to a bank is still an option in obtaining a home loan. This can be done by simply showing up at your local branch and requesting a home loan. Alternatively, most lenders have the option now to chat through options over the phone with a lending specialist. Going direct is a very different approach to using a Mortgage Broker as you will only be offered a product from that given lender and no comparison will be made against other lenders.
Benefits of going direct to a Bank:
- A lending specialist from a specific bank will have intimate knowledge of the current products and policies
- Could be faster due to the lender process the loan application directly rather than going through a Mortgage Broker
- Some borrowers might find the convenience and comfort of turning to a bank that they have dealt with for many years more favourable
The good thing is that as the borrower, you have a choice and ultimately it will come down to what your preference is. Whether you opt to have the guidance and support from a Mortgage Broker or if you prefer to go direct to a bank, at the end of the day there isn’t a right or wrong way.
With a house purchase typically being one’s biggest expense, more and more are turning towards the guidance and support of a broker. If you wish to discuss what may be possible at no cost then be sure to get in touch with the team at 40 Forty Finance.