Types Of Mortgage Lender:
If you’re a first-time home buyer or a homeowner looking to refinance, you’re probably looking for the best interest rate and lowest costs on your new loan however the lowest rate is not always the best option and it always pays to read the fine print.
It helps to decide what type of mortgage business you wish to work with. There are two primary options:
- Direct lenders (mainly banks and specialist mortgage firms) are financial institutions that arrange, process, and fund loans. In other words, the company in charge of your loan is the one who makes the loan. Large banks, credit unions, and mortgage lenders that specialise in home loans are examples of direct lenders.
- Mortgage brokers: A broker acts as a go-between, connecting you with the mortgage lender for your circumstances. Brokers work with many mortgage providers and can serve as a single point of contact to assist you in comparing multiple loan choices.
To discover the best loan for you, you could shop around with several direct lenders and compare offers for the same product and loan period, or you could go to a mortgage broker who will do the research on your behalf and then recommend a loan that is in your best interests.
Mortgage Broker vs. Bank
In general, if your loan is simple and your credit history, earnings, and assets are solid, you may be able to work directly with a bank.
If your mortgage application is complicated, or you would simply like to better understand the loan alternatives that are available to you, a broker who knows which lenders are most accommodating can assist you.
For example, if your credit score is low or you have a minimal credit report, a broker might be best because you may not qualify for a home loan with some lenders. A good broker will know which lenders are more understanding of your circumstances and are more likely to approve your loan application.
Mortgage Brokers’ Advantages
Mortgage brokers work in a different way than mortgage bankers. Here are some advantages:
- Brokers have access to a selection of lending programs and interest rates from several lenders. They may be able to offer a better and more specialised product to individuals in need.
- Banks and other direct lenders can only sell you their product. If they know that there is a better loan ‘down the road’, the are unlikely to tell you about it.
- Brokers have a duty to act in your best interests. This is called a “Best Interests Duty” and it is legislated. Banks do not have this same duty to you.
If you would like to learn more or are interested in using a broker Contact Us Today or Call Today at 08 6246 2680.
