HOW TO PICK A BANK OR BROKER

The options you have for a bank will be dictated by your financial situation. Banks give loans based on their credit policy which sets out how they value your income, how much they lend, acceptable deposit amounts, acceptable loan to property value ratios, the types of properties they accept as security and so on.

There are really only three ways to go about getting a loan either you walk into a branch and speak to them directly, use an online lender or you go to a mortgage broker for advice.

Remember: just because you see a cheap rate advertised doesn't mean you can get it. There are always eligibility criteria.

GOING DOWN THE MORTGAGE BROKER ROUTE

These individuals work as agents for banks. Where they differ is their ability to broke deals across multiple banks. For example, it is pretty common practice for a broker to have access to over at least 20 lenders which means a plethora of opportunity for the shopper.

PROS

Availability of options – multiple lenders and products.
You do not normally pay them directly; the bank does.
They have the ability to negotiate interest rates below what is advertised.
They understand bank policy, which means saving you time in searching for which bank will be willing to lend.

CONS

There is an abundance of brokers in the market and while some brokers can be highly experienced others can be newbies and not understand the whole process.
Brokers are paid commissions by banks and this can potentially cause bias in which loan products they present you.

Next >