Thursday 10 March 2022

Why a Mortgage Broker May Be Better Than Going Directly to a Bank?

Buying a new house can be an exciting time, especially for those who have found their dream homes. However, purchasing a home can be quite a challenge as well.

Many investors in real estate, especially first-time borrowers, have a hard time deciding if they should seek out potential lenders directly, like banks, or use the services of mortgage brokers. 

Practically speaking, it is a matter of personal preference. Both ways can be a means to secure your finance, but if we dive a little deeper, there might be a benefit in having a middleman between you and the bank.

To understand the benefits of using a mortgage broker instead of directly going to a bank, you need to understand the difference.

Why a Mortgage Broker May Be Better Than Going Directly to a Bank

Battle of the Two 'B's: Broker vs Banker

Mortgage Broker

A mortgage broker is an intermediary between individuals who need to borrow money to purchase a real estate property and a lender that offers such borrowing facilities. Mortgage brokers typically receive a fee/commission from the mortgage lender for recommending their products after the loan is closed, but some brokers may charge the borrower directly.

Mortgage Banker

A mortgage banker works for a bank or financial institution and deals with home loans. They assist the loan applicants in choosing among the bank's various mortgage loan options.

Why are Mortgage Brokers better than Banks?

Your Need is Their Priority

Ideally, your broker will take the time to assess your lifestyle needs and your financial status. They will have a one-on-one discussion about your present and past finance and your goals. They provide a written recommendation with the most suitable options.

A Comprehensive Panel of Lenders

Experienced mortgage brokers Brisbane will have a relationship with multiple lenders, including central commercial banks and non-banking financial institutions. They have a substantial understanding of the products available through the lenders and the loan processing system. 

They will help you arrange the necessary documentation required to be submitted for your loan application to be successful, saving a lot of time and effort.

Expert Advice Just a Call Away

Your mortgage broker is your advisor. They will guide you through the entire process of loan selection and application, making sure to avoid those costly mistakes, namely choosing an unsuitable loan structure. Owing to their experience, they will ensure that your loan application follows the lender's underwriting guidelines, minimising any chance of rejection.

Different lenders have different requirements, and it's wildly stressful for any individual not specialised in this area to find, compare and apply for home loans. Having a home loan broker Brisbane reduces the hassle involved in the process of going solo.

Monitoring the Application Process

Mortgage brokers will keep a close eye on the progress of your home loan application as soon as it is submitted and work with the lender to minimise processing time.

There are specific questions you should ask your mortgage broker:

1. Are they licensed and accredited?

2. What are their professional qualifications?

3. How many lenders are in their panel, and are they lenders themselves?

4. Do they have professional liability insurance?

5. Check for references

If you are confident and have a clear idea of what you want, you can approach a bank directly. However, there could be an array of more suitable options you are missing.

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