According to ASIC’s 2017 Review of Mortgage Broker Remuneration, about 54% of home loans were issued via mortgage brokers. The Australian Transaction Reports and Analysis Centre (AUSTRAC) is also expecting a growth of 9.6% in mortgage lending in the next few years.
These figures suggest that mortgage brokers are increasingly important. In this article, we’ll walk through the benefits and drawbacks of getting home loans via:
Get home loans from mortgage brokers
Why talk to mortgage brokers?
Mortgage brokers provide you with different options of home loans to get your dream property as smoothly as possible. They do not fund the actual loan. Importantly, they have connections to the finance industry and can spend their time researching financial products tailored to your requirements. Basically, they can do a lot of the work for you.
Benefits and drawbacks:
Mortgage brokers have greater negotiating power with banks. In other words, you might be able to avoid some fees and get a better rate. However, the downside is some brokers charge for their services (but not all do).
Get home loans from banks
Why talk to banks?
Banks are financial institutions offering a range of products and service. It’s effortless, when you already have an existing relationship with the bank.
Benefits and drawbacks:
Banks are highly convenient with apps, branches and customer support round the clock. However, banks will only offer you their in-house financial products and services. You might need to check out multiple banks to get a good idea of what’s a fair rate, which is very time-consuming.
Get home loans from lenders
Who are lenders?
Similarly, lenders are financially secured institutions that comply with the necessary Australian rules and regulations. The only difference? They are not an authorised deposit institution (ADI), which means they obtain their own funding and loan them out to customers.
Benefits and drawbacks:
Importantly, lenders can provide loans at a lower interest rate as they have a bigger margin to work on. As they are smaller, they tend to be faster in processing applications. They also have a reputation for being more willing to provide home loans even if you have fluctuating credit histories. Sadly, like banks, lenders can only introduce you to the financial products they offer.
So what?
In short, banks and lenders are the ones who fund you to buy a property. Mortgage brokers like Benevolence Financial Group (BFG) help you research the home loan market and pick the best one for you.
Fear not, for we are here to help at absolutely zero cost. As ethical mortgage brokers, we are committed to getting your home loan approved faster and easier. Buying a home doesn’t have to be painful.
Contact us for a free consultation today!
Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.
