Broker or Bank?

Broker or Bank?

Building a home is a big investment financially and emotionally, so when it comes time to consider your financing options, what is better for you? Dealing with a mortgage broker or going direct to the bank?

If you are not sure – here is a brief outline of their service and process.

Mortgage Broker

A mortgage broker will have access to hundreds of different types of home loans, and will compare each of the associated fees, rates or features.

Having a broad range of product to choose from, and having access to many industry professionals to assist you to obtain a suitable mortgage.

A mortgage broker is generally mobile so can work in around you and your family, during non-business hours, and their service is a no cost to the borrower as their commissions are derived from the lender.

With any application to borrow funds, your application is to apply directly with the finance institution that you select, and a mortgage broker effectively adds in one more step in the whole process.

There are a large number of mortgage brokers in the industry, it’s important for you to do your own research to determine which one will suit you!

Bank

Banks will have their own lending specialist who can provide in-depth knowledge of each of their mortgage/loan products, as these differ between each bank.

The lending specialist will generally also be the one who will assist you directly with the whole application, ensuring all the relevant information is provided.

Banks can have an advantage over mortgage brokers when they are able to offer package deals on other financial products such as credit cards, saving accounts, and multiple loan discounts.

Which one is the best for you?

 The answer to this question ultimately lies with you, your family circumstance and your current situation. While any finance application can be a stressful process here some additional tips for you;

1. Research – Make sure you compare and understand what products are being offered to you.

2. Extra advice – Both banks and mortgage brokers are not real estate agents, nor can they provide advice on any tax planning. Seek professional advice from accountants or solicitors where required.

3. Justification of their recommendations – with any offering, have the provider justify why this is a good deal.

4. Haggle – If you don’t ask, you don’t get! Even a small percentage saving can make significant difference to the overall loan and interest repayment.

5. Fees – Ensure you have a clear understanding of what the mortgage application and set up fees are, and also any annual or ongoing fees that might apply.

 

Note: The information provided on this blog is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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