28 Feb Using a Mortgage Broker vs Going Straight to the Bank
In years gone by, applying for a mortgage was a matter of taking a day off work, putting on your best suit and heading into the bank to meet the bank manager to make your case for a home loan.
Times have changed and now it is common for home buyers and investors to go out and look for the best mortgage broker in Melbourne they can find before they even begin looking for a property to purchase.
Using a mortgage broker to purchase real estate in Melbourne is one of the best ways to ensure you will not only get the best outcome, but they will be able to match you with the right lender to suit your personal situation with the lowest interest rates and fees possible.
Advantages of Using a Mortgage Broker
A good mortgage broker is able to do this by screening the borrowers lending requirements, assessing their property and finance goals and then pre-qualifying the client.
The best mortgage brokers are able to speed up the application process and take the stress out of applying for a loan by handling all the paperwork. Given their vast knowledge of lenders and loan products, you will likely be able to settle the loan faster after being preapproved which gives you an added advantage when negotiating on the price of your property.
There are dozens of lenders in the market place and literally thousands of loan products. Melbourne’s best mortgage brokers will be able to narrow down these offerings to find the type of loan that is most suitable to you.
For first home buyers or investors, getting a ‘yes’ from the lender is absolutely critical, so having more options will increase the likelihood of a successful outcome.
Different Lenders Focus on Different Areas
Not all lenders are created equal and the best mortgage brokers in Melbourne know that. Some lenders might be most comfortable taking on those who have different employment situations, such as being a casual worker or self-employed. Other lenders might offer great products for first home buyers.
For example, if you are on a casual income you’re not guaranteed a wage and some lenders will simply not accept that. If you walk into the wrong lender’s office, you could be told to come back in 6 to 12 months or even that you can’t get finance at all.
However, one of our lenders only requires your last three months income and they’ll annualise that out. Contact us for further details.
If you don’t know what’s out there, you could easily fall into the trap of delaying your property purchase because you simply aligned yourself with a lender that didn’t match your personal situation.
If you are looking to purchase multiple properties as an investor, it is critical that you apply to lenders in the right order as you build your property portfolio. The best mortgage brokers in Melbourne will assess the lenders that have stricter policies and secure loans with them first.
That’s because borrowers generally will run into issues with servicing loans after a period of time if they accumulate multiple properties that are negatively geared. A mortgage broker will be able to help you move forward by structuring your property portfolio in the most optimal way.
A good mortgage broker will also make sure your portfolio is spread across multiple lenders to give you flexibility and ensuring you are not at the mercy of any one lender should you want to revalue a property to access more equity.
Advantages of Going Straight to the Bank
The truth of the matter is there are not that many reasons for a first-home buyer, upgrader, downsizer or investor to go directly to a bank. But when you reach a certain level of sophistication, there might be some benefits.
A bank might only have 20-30 loan products and if you are able to deal with an experienced bank manager, they might be able to match you perfectly with a loan product.
The catch is, they are only matching you with their loan products. So while they have a greater understanding of what it will take to get you approved, the options are still far more restrictive.
The Ability to Lend Outside of Policy
Every borrower must satisfy the lending criteria in order to get a loan. For the best mortgage brokers in Melbourne, they have the ability to workship client situations with a business development manager at a bank or lending institution. But ultimately, they need to remain within the lender’s policies in order to get that loan approved for their clients.
For the most sophisticated investors out there or those with very unique situations, there can be some benefit in dealing with a bank directly.
That way the bank manager can use their relationships with the internal credit departments to help get a loan approved even if the borrower doesn’t tick every box. But this is really only for exceptional cases and ultimately you still need to be a borrower with a strong credit file, a reasonable deposit (or equity) and the ability to service the loan you’re applying for.