You’ve found your ideal home and now all you need is the right mortgage. But, you can’t decide whether to approach your bank, who you’ve been with for years or a mortgage broker, who could offer you a more competitive mortgage.
Your decision to choose one route over another shouldn’t be loyalty-based. Why? Because most banks assume you’ll choose them for your loan, rather than a broker, as they have greater financial backing. Of course, you also must remember that bank charges are often higher than smaller lenders, due to demand.
What are the differences between a bank and a mortgage broker?
Both a bank and a mortgage broker can help you find a loan to finance your property. But, when it comes to making the right financial decision, it’s vital that you draw comparisons between both services, in case you’re able to save more.
Here are the major differences between the two:
|The bank||The mortgage broker|
|Makes bookings based on their schedule.||Makes bookings around your schedule.|
|Offers support at the time of loan application.||Offers support over your loan’s lifetime.|
|Provides a selection of their loans.||Provides multiple lender loan selections.|
|Gives you simple product comparisons.||Gives you in-depth loan comparisons.|
|Offers limited advice.||Offers comprehensive advice.|
|Provides traditional lending solutions.||Provides lending solutions that fit most needs.|
|Gives you the application to fill out.||Fills out the application and paperwork for you.|
While a bank and a mortgage broker technically provide the same service – a loan to buy property – they don’t necessarily provide the same level of service. A broker often offers a more personalised service, going out of their way to make sure you find a product that suits you and your circumstances. A bank, on the other hand, tends to offer you a generalised service, and you are limited to loan choices from their selection.
What are the main benefits of using a mortgage broker?
There are many benefits associated with using a mortgage broker when it comes to taking out a home loan. Some of the biggest drawcards are:
- Convenience – If you’re time poor, which many of us are due to work and family commitments, then a broker makes appointment times that suit you and your lifestyle. Often, a broker will visit you at home and can even visit you after office hours or on weekends.
- In-depth loan search – Rather than showing you one or two loans, a mortgage broker asks a series of questions about you, your needs and your existing financial circumstances. Then, they’ll find you loans that match your needs. A broker then compares each of these products and provides you with a comparison so you can discuss your options.
- Greater product variety – Mortgage brokers typically have a selection of lenders on their panel, with these lenders offering multiple loans. As a result, you can choose from the bank, credit union or building society products, with many at discounted rates.
- Fast loan application – When you contact a mortgage broker, they’ll arrange a time to meet. During your meeting, they’ll gather the information they need, before recommending products. If you decide on one of these products, your broker will assist you in filling out your application and gathering the needed documentation to support your claims.
- Professional advice – With so many products available, selecting the right loan can be tricky. Your mortgage broker is on hand to educate you about home loans: by understanding how different loans help to reduce interest, you can save more over the term of your loan.
- Credit repair – If you have a poor credit history, then a mortgage broker can help you to understand why and then show you ways you can repair your record. Often, they’ll also be able to find home loan products that suit your situation.
- No charge – In most cases, a mortgage broker offers their services for free, as the lenders on their panel pay them at the time of loan settlement. This means you can take advantage of the professional advice and all the other benefits associated with a broker without paying any extra fees.
How can a mortgage broker help me?
It doesn’t matter whether you’re a first home buyer, an investor or someone seeking to refinance, a mortgage broker could help you. Individuals and couples who are self-employed or who have a poor credit rating can also use a mortgage broker to find the right loan for them.
Regardless of what stage of the buying process you’re at – you may have just started your search for a property and are looking to gain home loan pre-approval, or you may have found your perfect home and want to buy now – a broker may be able to help.
Just remember, there’s more to a home loan than an interest rate. When you look at different loan options, consider your financial circumstances, your long-term goals and need for flexibility and don’t be afraid to discuss this with your mortgage broker. The more information you provide to the broker at the time of your initial meeting, the better their chances are of supplying you with a loan that’s right for you.
Are you looking for a home loan, but you’re not sure where to start? eChoice’s expert brokers can help you understand the market and simplify the process of applying for a mortgage. We have access to hundreds of products, so we’ll find you a competitive rate.