Which Is Better: Using a Mortgage Broker vs. Direct to Bank?

Have you ever wondered why 67% of homebuyers in Australia use a mortgage broker when looking for home loans? What value are they getting from mortgage brokers that they cannot get from a bank? 

Whether you are a first-time or next home buyer or looking to refinance, you may have questions about how and with whom to get started. Should you go directly to the bank or work with a mortgage broker who has your best interests at heart? It is essential to know the difference between a mortgage broker and a bank loan and why you should choose the former over the latter. While both options work to secure your home loan, the services, expertise, and value they offer are significantly different.

Couple having a chat with a mortgage broker
A couple having a chat with a mortgage broker

Why You Should Use a Mortgage Broker Over a Bank 

In this article, we present to you a comparison of services between a broker versus a bank for your home loan with the hope to inform your decisions when you decide to enter the housing market. We strongly believe that it is in your best interest to go through a mortgage broker and here is why.

Get More Home Loan Options With A Mortgage Broker

Where a bank can tell you about their products and loan packages only, a broker such as Benevolence Financial Group (BFG) will have many banks on their panel from which you get to choose the best loan structure for you. By going to a mortgage advisor, you are exposing yourself to a lot more options and can be assured that you get a loan deal that is favourable to your situation.

Competitive Interest Rates Throughout Loan Term

Banks generally have no obligation to ensure you have a healthy home loan throughout your loan term. However, a mortgage advisor will regularly review your mortgage to make sure you are still getting competitive rates on your mortgage and will facilitate switching to a lender with the most favourable rates for you.

Enquiries With a Broker Have Low Impact On Your Credit Score

Whenever you make an enquiry to different banks for a home loan, they review your financial status and create a record even if you do not end up borrowing with them. However, when you go through a broker and they make the enquiries on your behalf, there is no footprint left on your credit score. 

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Mortgage Brokers Are Home Loan Experts

Brokers will look at your home loan application and work out a favourable outcome based on your condition. On the other hand, The bank doesn’t understand how your income is valued, which can lead to misunderstandings on payslips.

You Get Better Customer Service

It is in the broker’s best interest to nurture a good relationship and positive long-term outcomes for their clients. Their business is generally dependent on referrals. They go above and beyond the conventional office hours and level of assistance. Banks, however, will only work through normal business hours and give usually give you an average customer experience.

Brokers Adapt Better To Give You Convenience

With the advent of online mortgage brokers, you can apply and submit documents online without ever visiting the office. While banks do have online application options, most of them will still require you to physically submit documents.

A Mortgage Broker Has a Legal Duty to Act In Your Best Interest

Mortgage brokers operate under an unrivalled ‘Best Interests Duty’ when providing you with credit assistance. This means we have to give you peace of mind and act in your best interests. On the other hand, the best interests duty that came out of the Royal Commission’s recommendations doesn’t apply to banks.

Conclusion

Buying or building a home is one of the most important decisions you’ll make in your life. As a decision you will have to live with for many years, you need to get the best deal upfront. So why not go through that journey with a helper that has your best interests at heart and gives you expert advice during the process? And the best part about all this is that you do not pay anything for this service. Everything a broker does for you is FREE FOR LIFE. At least that is the case with Benevolence Financial Group, an ethical mortgage broker.

To put the cherry on top, when you get your home loan through us, you help to build a home for another family in need. And no, you do not have to put anything extra into your payments. We invest 50% of our profits into building homes for those displaced by natural disasters around Australia and Asia on your behalf. We call it “A Home for a Home”.

Looking to get into the property market?

Unsure of what the process looks like? Do you simply want to impact lives by buying your own home? Schedule a no-cost and no-obligation chat with us and we promise to answer any questions you may have. Let us help you find the best loan deal from our panel of over 35 banks.  

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.