Mortgage brokers vs banks: which way to go?

Finding the right home loan is as important as finding the right house, its suitability and serviceability affecting peace of mind and financial security into the future. So, what’s the best approach for you?

Generally speaking, applying for a home loan via a bank is the most direct approach given the lack of an intermediary, while using a mortgage broker offers access to a much wider range of loans across many different lending institutions. Let’s take a closer look.

 

Mortgage Broker Bank
Assesses your situation and credit rating to find the most suitable loan, and offers a range of options with comparative rates and features.

Has access to hundreds of loans through dozens of lenders, is experienced at finding the best deals, and compares rates across a broad sector of the mortgage industry.

Can advise you throughout the entire loan process, whether you opt for a loan with a bank or non-bank lender.

Generally does not charge a fee, since brokers get commission from lenders, not borrowers. The lending institution you choose, however, may charge fees.

Explains any suitable loans from within its own set of mortgage options, and suggests the one most suited to your needs.

May offer existing customers with a strong credit rating and stable income an attractive rate, and package deal on other products. Customers might also negotiate a more attractive rate.

Offers assistance with the loan application, while offering support and detailed advice through its lending specialists.

While some banks charge few fees, most have an application or settlement fee together with other fees. You may wish to query these from the outset.

 

It’s important to note you’ll need to apply for a loan through a lender regardless, and that using a broker requires an extra step in the process. While applying direct to a bank can be a more streamlined approach, buyers should do their homework in advance, and ideally have loan pre-approval to place them in the best buying position possible.

As always, our Noel Jones consultants are available to provide support in any finance related matters to help achieve your goals, and, with contacts in the finance and mortgage industries, can also point you in the right direction.

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