When searching for home loans, you can use a mortgage broker or work directly with a bank. Working with a bank directly sometimes costs less and gives you more control, but a broker has a lot of benefits to offer as well. Whether it is better to work with a broker or get a loan from a bank directly depends on your preferences and financial situation.
What is the difference between a bank and a broker?
Banks are direct lenders when you are getting a mortgage. There are other types of direct lenders such as specialty lenders, online lenders, credit unions, and more. When you shop for a loan with a bank, you are doing the research and figuring out whether the bank is right for your needs. This means that there are high chances you will find yourself needing to make a list to keep track of fees, rates, and other important considerations.
On the other hand, a broker acts as an intermediary between a direct lender and you. After discussing your needs with a broker, the broker will take care of everything on your behalf. They will reach out to their contacts and come back to you with some of the best options for your needs – many of which you’d not ordinarily consider. Brokers will then work with you to figure out the best loans that suit your needs and continue to facilitate the transaction.
Pros of using a broker
Mortgage brokers come with several advantages over working directly with banks. They will research for you and find the best lender on your behalf. Brokers may have access to more resources when it comes to home loans.
- Help with the preparation
You can start working with a broker early in the home buying process. They will answer your questions about getting a loan and help you go about gathering the necessary documents and information you will need to apply for a loan.
- Access to various loans
Mortgage advisors can present you with various home loan products the bank or other lending institution offers. If you are looking for a type of loan that is less common, a broker can give you a shortcut to the relevant lenders.
- Brokers offer customised assistance
If you are someone who doesn’t qualify for a normal loan, or your circumstances require more explanation, a broker may help you find a lender who will suit your situation. Even if you are a borrower who would not have any trouble getting a loan, a broker will meet with you and go over various loan options. They will highlight points of comparison and help you in making informed decisions.
Getting the right home loan is a time-intensive process. After doing all the due diligence to get the right lender and loan product, the application and loan closing are intense processes with a lot of back and forth. A broker will handle all the paperwork for you and deal with the lender. This will save you stress and time – and there is no more convenient way of going about securing a loan than by using the right mortgage broker.
Written by Lifestyle writer Kirsty Jones