Mortgage Broker Versus Bank
When seeking a home loan, borrowers have traditionally headed to the bank. In the good old days, you would pop in on the big building on the corner that had been your bank since you were a little nipper and chat with the bank manager who knew your family, your finances and your needs.
Well, the good old days are over. Your big old bank has been converted into an apartment block with a café on the ground floor. Your branch has closed down and the nearest one is miles away, not that you need bother going there anyway because your bank manager changes every six months and in any case he/she doesn’t arrange home loans these days.
That’s the job of the new loan manager you have never met and who is more likely to deal with you by email than face-to-face. It is of no interest to him how many years you have been loyal to the bank, you must adhere to the bank’s rigid lending policies, the same as anybody else. And if you don’t like the products he offers you, bad luck because the bank’s products are the only ones he can flog.
The new world, the new way
Now, imagine a world in which you could develop a rapport with a real person, a specialist in lending, someone who would get to know you and your borrowing needs, someone who is not tied to a particular financial institution, but who researched what different lenders have to offer. This person exists – he/she’s called a mortgage broker.
A mortgage broker is a one-stop shop. He searches around for the best rate based on your needs, often able to procure a better rate than offered by your bank. He liaises with your valuer, solicitor, builder, real estate agent as need be, working with you at every stage of the process. He may even be able to arrange a mortgage for the self-employed and those with poor credit histories whom the bank would knock back.
But mortgage brokers are dodgy and charge high fees, I hear you say? Not at all. In fact, banks received a bad rap from the Royal Commission, but mortgage brokers were vindicated. Far from being fly-by-nighters, all mortgage brokers must hold an Australian Credit Licence (ACL) or be a credit representative under a wholesaler licence.
Let’s talk holidays for a moment. When you were planning a trip in the old days, you would have booked a hotel room directly with the hotel. You took whatever rate they offered you, no questions asked. These days you check out Trivago. You can see the rates offered for the same hotel room by various operators. Not only that, you can discover other hotels at your destination that you never knew about and that may suit you even better.
Now back to lending. Think of your bank as the hotel and think of your mortgage broker as Trivago. You are not tied to one bank and their product, but you are presented with an array of offers. It’s your call which one suits you the best but isn’t it better to have a choice?
How can we help
Call Declan Hanrattty on 0409 089 456 to see if we can help you or shoot us an email.