To head straight to a bank lender - or enjoy aid from a mortgage broker?
This is the question for current and 2024 home buyers.
And rightly so, with interest rates now at their highest figure in 12 years and another potential increase to come next week.
Let's look at these two options.
A mortgage broker acts as a mediator between a home buyer and a lender, negotiating on behalf of the buyer to ensure they receive the best possible loan for their requirements.
Yes, effectively, the broker does all the hard yards of finding the best lender and loan for you, and voila!
You're a homeowner with a fantastic home loan.
Going deeper, mortgage brokers know about a range of home loan products from different lenders, including ones that the general public doesn't know about - and can negotiate with lenders to ensure you receive them.
Alternatively, home buyers may choose to go directly to bank lenders to find and affirm the above.
This way of finding a loan may or may not take further time and investigation, depending on your home-buying experience.
We liked how Momentum Wealth explained it:
"A good mortgage broker with a thorough understanding of their client’s investment needs will always look to structure a loan in a manner that supports their long-term goals and enables them to move forward in their investment journey.
"Banks, on the other hand, will often look to structure a loan in a way that mitigates risk for them".
Yes - in a way.
Brokers are free for buyers.
But the lender you choose to go with - via the broker's advice - will pay the broker a commission for that same advice.
This is where you need to be a little careful when bringing a broker on board as there's a chance they may favour a lender who pays them more in commissions, rather than the one that pays them less but better suits you and your requirements.
As we've said in our earlier article on brokers, be mindful of potential fees such as those for administration, small loans, complex loans, and cancellations as well as "commission clawbacks".
Also ensure you're across all payment points with your broker, including terms and conditions.
Finally, don't be afraid to ask the broker plenty of questions and as with everything on the home-buying road, ensure that you are happy and confident with the final home loan decision.
There is no right or wrong answer to this question, and the same goes for which option will give you an easier, swifter home loan result.
Mortgage brokers can be helpful for nervous first-home buyers, as brokers walk beside buyers every step of the loan way, explaining any odd details and financial issues.
They can also be helpful for those with a low deposit or unusual financial circumstances, such as sole traders or small business owners.
Savvy property investors typically rely on their mortgage broker to save them time and stress.
Bank lender pros:
Our mortgage brokers have access to thousands of home loan products from over 40 lenders so we can compare multiple offers for you in one place, saving you both time and money.
Plus, we can also help you refinance your loan so you can enjoy more money in your pocket.
So, give us a call today at Lending Loop.