Why Should We Opt for Mortgage Brokers and Not Go to Banks Directly for Loans?

Why Should We Opt for Mortgage Brokers and Not Go to Banks Directly for Loans?

Buying a new home especially the first one with a home loan is a big investment decision that should be made after thoroughly researching all the financial variables that are involved in the process. Many times, the first-timers just reach the first local bank and apply for a loan, which costs them a huge rate of interest.

If you do not have the market knowledge, it is best to reach out to a mortgage broker for they have expertise in comparing loan products according to your needs and also have a good network of lenders with whom they can negotiate repayment terms to ensure that you are not paying huge amounts for such a long-term.

In Sydney, there are many reliable mortgage broker companies like Sydney Brokers who have the license and skills to get a personalized loan solution for you. Whether you want to pay lump-sum amounts to reduce interest rates or you want a longer repayment cycle, they can help you in getting the right one just suited to your financial needs.

You can also take the broker’s help to get a pre-approved estimate of the loan amount that you can get before you even start your home search.

Benefits and drawbacks of directly applying for a bank loan

The pros

  • If your finances are in good stable condition along with a positive credit score, you can directly reach a local bank for a loan application.
  • If you have a good relationship with your bank, you can define your loan terms with them and get easy approval.
  • This process also permits automatic deduction of the repayment amounts directly from your bank account.

The cons

  • They have limited loan products available from their bank.
  • Therefore, there are higher chances of missing out on better deals.
  • If your credit history is not up to mark, it can further go down by frequent unsuccessful attempts at getting loan approval.

How can a mortgage broker benefit you?

  • They have access to a wide range of lenders and hence, can introduce better loan products that fulfill your needs in better ways.
  • You can compare these products based on the interest rates, repayment terms, and loan processing times.
  • You can get access to non-banking financial institutions as well.
  • Therefore, after thorough research, you can choose the best deal.
  • They provide you the convenience to schedule your meeting time as per your work commitments.
  • This is unlike a bank where you have to follow their schedule.
  • You hardly have to pay any fee to the broker as they are paid by the lenders.
  • They are experts at completing all the paperwork. This can save you time and multiple failed efforts at submitting incorrect applications.

The only drawback while selecting a mortgage broker is that there are plenty in the market and they may prefer loan products by those banks that are paying the higher commission charges. So, it might take some trial and error in questioning different brokers and then selecting the right one according to their knowledge, availability of multiple options, their understanding of your specific financial situation, and of course, and their license status.

Leave a Reply

Your email address will not be published. Required fields are marked *