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When you’re looking to buy a home, should you go to a mortgage broker or direct to a bank? Many people aren’t sure, so here we’ve taken a look at the pros and cons of each, so that you can more easily decide which will be best for you.
Why a broker?
A lot of people are understandably wary of mortgage brokers, but since the SAFE act of 2008, they now have to pass a test to prove that they know the rules. They are also forbidden from encouraging customers into risky mortgages. So, with that out of the way, what are the advantages of using a mortgage broker?
If you have little time, or if this is your first mortgage, you could do a lot worse than to let someone else do all the hard work of finding one for you. Brokers are able to offer a lot of flexibility and variety in your mortgage options, something that would be difficult and time consuming for buyers to do themselves – and not only that, but they can do all the paperwork, and answer questions or explain unfamiliar terminology. They are also experienced and can often head off problems before they arise. You could save yourself some time by shopping around for an online mortgage broker like Habito.com. You don’t just have to stick to one, either – there is nothing to stop you going to several brokers at once.
Why a bank?
While brokers can offer flexibility and variety, going direct to a bank can give you stability. Not only that, but you won’t pay a brokers’ fee on top of your mortgage – there are plenty of other hidden costs to buying a house, so the more you can eliminate the better! If you’re experienced with finance then you might find it easier to organize the mortgage yourself. Plus you might be able to build off your existing relationship with the bank, which could get you a discount. If your banker already knows you and your financial situation it could make everything go much more smoothly.
Better to compare
Either way, you need to take a look at the pros and cons of both banks and mortgage brokers, and work out which is best for you. The only way to make a choice like this is to fully examine all your options. Don’t just rely on this article – do your own online research, and search Google for any specific questions or concerns you might have.
Finding the right mortgage option according to your needs
If you’re inexperienced or have little time, then the skills of a broker can be more than worth paying for, but you might find that working directly with the bank gives you a better price, and lower monthly payments. Whichever you decide, you need to make sure that your house doesn’t end up costing you more money than it absolutely has to. Have a look at our list of ways that your house might be wasting your money, to make sure you’re not losing out!