ARE MORTGAGE BROKERS BETTER THAN BANKS?
- Thalia Comino
- Apr 17, 2023
- 4 min read
Updated: May 27, 2023
Are you in the market for a new home in Brisbane and need help with where to start with your mortgage? Using a Brisbane mortgage broker can make all the difference when finding the perfect loan.
While it’s easy to head straight to your local bank or lender, did you know that an even better option is available? Finding a mortgage broker who can guide and assist you is essential.
In this blog post, we’ll explore why using a mortgage broker may be more beneficial than going directly through a bank.
Let’s dive in!
Table of Contents
What is the Difference Between a Bank and a Mortgage Broker?
First, let’s establish the difference between the two, so you can tell if working with a broker is a better option when seeking a home loan.
Banks have Limited Products Available
For one, banks are limited to their own products, but brokers can access loans from various lenders. This range of choices gives you more options and increases the chances of finding the right loan for your needs.
More Flexibility by Using a Broker
By using a broker, they can look for a product and policy that meets your needs. Not all lenders have the same policies and mortgage products. Your broker will research to find products that will align with your requirements.
For example, are you a new business with limited financials or are you a PAYG employee with a payslip each fortnight. Your employment status can determine whether you meet their policy requirements.
Where one lender might be restricted as to how long you have been in a job, another might have a policy that suits.
The role of the mortgage broker is to research their panel of lenders to find a policy and pair it with good pricing to meet your requirements.
How Does a Mortgage Broker get Paid?
The lender, not the borrower, pays mortgage brokers. They pay the commission when the loan settles, a percentage of the loan amount.
Some lenders pay a higher commission to mortgage brokers to encourage them to source business from them, which is something to be aware of.
Asking how your mortgage broker receives payment and their fees is essential, as you don’t want a mortgage broker with a conflict of interest.
Mortgage brokers may also receive a flat fee for their services.
The Advantages of Going Direct to a Broker
There are several advantages to going directly to a broker for your mortgage needs, including:
Choice of Loan Products
One reason is that mortgage brokers can access more loan products than banks. Accessing this variety means they can shop around for the best loan for you, rather than being limited to the products offered by one bank.
Different Interest Rates
Another reason to use a mortgage broker is that they can often get you a better interest rate than if you went to a bank direct. Again, this is because brokers have relationships with multiple lenders and can shop for the best offering.
Familiarity
An existing relationship with your broker can mean you would feel more familiar with them instead of starting over with a new home loan contact or new bank.
Simplicity
Some home buyers find working directly with a lender to be daunting. Especially if you haven’t “Clicked” with the person who is dealing with you.
You should be forming a long- term relationship with your broker who should understand your needs and requirements. Many of the lenders have high turnover of staff. This means that you could be talking to a new person every time.
Control
As the borrower, you can be more directly involved in the process and have more control over the process.
What Do Mortgage Brokers Offer that Banks Don’t?
Access to a Variety of Lenders and Products
Mortgage brokers have access to various lenders, including banks, credit unions, and private lenders. This extra choice means they can find the best loan for your circumstances.
Expert Negotiators
Mortgage brokers are expert negotiators. They know how to get the best interest rate and terms for your loan. Having them negotiate on your behalf can save you large amounts of money over the life of your loan.
Save you Time and Money
They will do all the legwork for you, so you don’t have to deal with multiple banks or fill out numerous application forms.
You don’t need to worry about sifting through all the loan products. Your Broker can quickly select the best ones for your situation.
Final Thoughts on Mortgage Brokers Vs Banks
Using a mortgage broker can be invaluable for finding the best loan for your needs. They have plenty of experience and knowledge about the local market.
They can provide you with personalised advice that will allow you to make smarter decisions when borrowing money. Brokers also have access to a network of lenders so that they can negotiate better deals on behalf of their clients.
Ultimately, going through a mortgage broker is much faster and more efficient than going directly to banks or other financial institutions, making the process a lot more pleasant.
With the help of a Finby mortgage broker, obtaining a home loan doesn't have to be complicated. They will guide you through every step of the way and help tailor your repayments based on your financial goals.
