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Should I see mortgage brokers for my home loan or go to the bank directly?



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Mortgage brokers versus banks/lenders: it’s a difference you may have heard about but you’re still unclear what it really means. In this article, we’ll walk you through the pros and cons of both.

Why go to a bank for your mortgage?

To most people, going with one of the big banks is a safe bet. “Commonwealth Bank and Westpac are too big to fail.” It’s true that your average bank isn’t going to collapse any time soon. But, there’s also no reason to think a mortgage broker will. If this is the only reason you’re considering a bank, it might be wise to rethink your approach.

Banks offer loyalty bonuses and discounts if you bundle other financial services with them, such as a business loan, personal loan, or credit card account. So, if you qualify, then it make sense to go directly with your bank.

Why go with mortgage brokers?

Mortgage brokers, like BFG, offer specialised advice. A bank offers many different financial products but with brokers, they boast specialised knowledge.

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It’s a common misconception that using a broker for your home loan is more expensive than going with a big bank. In fact, it can often be cheaper, because brokers work with banks to get the best possible interest rate for their clients. As the client, you don’t pay your broker a cent – they receive a commission from the mortgage provider.

You can rest easy in the knowledge that mortgage brokers must hold an ACL (Australian Credit Licence) or be a credit representative under a wholesaler licence. Brokers are legally bound to refrain from providing advice that will leave a client in a worse off position.

Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstances and requirements.

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