When it comes to raising finance for your housing purchases, I have seen a large shift in people using Brokers instead of going straight to their Bank.
For anyone who doesn’t know, Mortgage Brokers act like the middlemen between Banks/Lenders and the borrower – you!
Banks work directly with the home-owner to provide the finance needed, so it is like taking a whole person out.
Most home-owners will turn to a Bank directly, mainly because it is the most obvious choice, but also because we see the Ads on TV with the Interest Rate advertised which is how we come to giving them a call.
Sometimes you will find that your Bank will even call you once you have a substantial amount of savings in your account, and offer you a consultation and a rate.
We also tend to feel somewhat secure and safe with using one of ‘the Big 4’ too because we are familiar with the brand.
The downside is that the process to go direct to a Bank can be frustrating.
Due to the size of the organisation you can have long wait times on hold, and just the overall bureaucratic system that is a ‘Bank’ can get a bit too much for some.
For some people who have trouble qualifying or have an abnormal deal, they will often be turned away from the Banks, which leads them to a Broker.
What some people don’t realise is pricing with Brokers can be just as competitive as a Banks.
A Brokers experience can be more consistent too – as they are across the board with all different Lending partners and their packages.
They compare the rates to a large number of Banks and Lenders all at once, kind of like ‘Webjet style’ application, and may even find more options and better rates.
Now, when it comes to fees some Brokers are fee for service, so it is worthwhile asking if they charge you or if they get their income from the Bank you end up getting the loan from. It is not uncommon to find a Broker who doesn’t charge either – it is just a question to ask.
Here’s my view…
Both options have a human attached to them so you can always make mistakes with any (and every) part of the process – But I would say having two sets of eyes look over everything is better – which makes choosing a Broker more appealing to me.
I, much like you, am way too busy with life and don’t have the time to be chasing a Bank so the idea of having someone else to all the running around for me is a deal!
To sum this up, if you want someone to guide you through the loan process, and be more accessible, a Broker may be a good choice for your situation.
In saying that be savvy yourself, and compare the options you are given to make sure you have the best rate and package for you.
Also, the power of referral is exceptional when it comes to this – if you have someone close to you who has referred you to their professional, then give that a go.