Why Should you Choose a Broker?
It would appear that gone are the days of traditional banks being the only means to organising a home loan. Tighter lending criteria, a loss of faith in the banks and better-educated consumers have increased the number of people using mortgage brokers over the past 10 years or so. Here are a handful of reasons to seek out a broker for your next home loan.
FREEDOM OF CHOICE
Generally, brokers offer access to multiple loans from multiple lenders. When compared with going to one institution for a loan, the vast range of options means you really can find a facility that suits you. At the end of the day, competition and choice helps customers get the best deal, and for this they go to a broker.
YOU DON’T PAY A FEE
Most brokers don’t charge their clients an up-front fee to use their services (and if they do, they need to give you a Credit Quote for your agreement). Rather, they receive a commission from lenders, and are required by law to disclose the details of these payments under the National Consumer Credit Protection Act to ensure transparency and to give you the peace of mind you’re after. When you meet with a broker, ask him or her to provide you with an overview of their commissions.
As brokers bring together loans from multiple lenders, you don’t have to spend your valuable time shopping around. A broker will make the most of your appointment time to get the necessary information in order to narrow down and present you with easy-to-understand options, saving you hours of online research and hard-to-translate comparisons.
IT’S ALL ABOUT YOU
A mortgage broker aims to find a loan that’s right for you. Because brokers are not employed by banks, their main focus is to find a loan that’s right for your circumstances. In addition, brokers take the time to understand your financial situation and goals, and factor this in when searching for finance options. This could be saving for a family holiday, having a baby within a few years, or ensuring some savings for retirement. A mortgage broker can recommend a loan that makes financial sense for you.
MORE ACCESSIBLE FINANCE
For those with a poor track record or less predictable income, stricter credit rules have made it more difficult to borrow. While no magic wands are waved, and higher interest rates might apply, a broker may be able to suggest an alternative option that’s right for you, and will work as best they can with your personal circumstances.
Buying a home and taking out a loan is an exciting, momentous and stressful milestone in life. Brokers can alleviate some of the stress by dealing with the lender and managing your application process through to approval. Also, brokers can arrange after-hours appointments to fit your schedule, as opposed to fitting in with regular bank or lender times.
THE LATEST LEGISLATION
Another part of a broker’s job to stay on top of all relevant legislation so they can make the right recommendations for customers and ensure they meet lending requirements, which have tightened in recent years to reduce the risk of loan defaults and help maintain a stable economy. Brokers stay apprised of industry, economic and regulatory shifts to reduce unexpected roadblocks for borrowers.
HOME LOAN HEALTH CHECKS
Much like servicing a car or having a check-up with your GP, your broker can run a regular health check on your home loan to see if it’s still right for you. Competition remains high in the mortgage market, so it’s always worth asking your broker to reconsider your options. Keeping on top of this can potentially help you pay off your loan sooner, and perhaps help you pay less interest.
IN IT FOR THE LONG RUN
A significant distinction between bank managers and brokers is that with brokers, you’ll always be speaking with the same person. This is a relationship that can form at the start of the finance or re-financing process, and perhaps carry right on through for the life of the loan. Having this consistent point of contact can make the whole process easier, simpler and less stressful.
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