Hi,
I decided to look for home loan to purchase our first property. I have some basic knowledge but would like for advise if it is better to go with bank have account with or mortgage broker?
We would be borrowing less than 80% value of the property and and would have 100k deposit.
Are there any advantage to choose banks over brokers or is it simply all about getting the lowest rate?
I think it depends on what you need it for.
My first home loan, just wanted basic, so went cheapest one with 100% offset account (with loans.com.au).
I think if you wanted something a bit more complex, maybe for an in an investment, could be worth seeing a broker as they may be able to get you a better deal than going direct.
To be honest, my experience with broker is surprisingly unpleasant.
They had a demo at Doncaster Shopping Town (VIC) late last year and I followed up with them in March 2016. I did say at the time I wouldn't be looking into home loan refinancing until next year (which was 2016).
They did follow up with me but then when I presented them with the facts of what I am currently having with my existing financier, they went cold and I have never heard from them since.
I am now dealing direct with Bank of Melbourne and I got a much much better treatment. To be honest, I didn't really need to refinance but BoM clearly showed interest in my business so I may be trying with them soon.
Oh well… brokers' loss… :-)
buddy
You may get a better deal with a broker. Thats my personal experience.
Don't be wedded to either option.
Explore both options and go with the cheapest. If they are close, go with the most convenient one.
We went with reduce home loans (broker for non-bank lenders). They are the best deal I have seen so far.
how was your overall experience with reduce home loans? I am thinking to start processing with them.
No problems at all. The account manager we dealt with was super helpful and met us in person on the weekend. There was a lot of backwards and forwards with forms, I feel like we were filling in the same info over and over, but I think that's pretty normal.
If you don't mind telling account manager initials? Are you based in NSW or QLD? Thanks
@userblocked: Definitely SR. I'm just relaying my experience, the only real gotcha that I'm aware of is the high exit fee. The visa debit card was also not a good deal (if they offer it) was much cheaper to just keep a small amount of money in another account for taking out as cash.
I'd suggest going to a broker to have a chat about what options they can offer. They may also have views on best way to structure your loans etc and they can advise on things like how long lenders processing times currently are. I would also shop around the non-bank lenders, particularly if the interest rate itself is most important to you. Remember that brokers only have a limited number of lenders on their panels and often this doesn't include many of the non-bank lenders with the best rates. I went to a broker recently and they tried to push CBA and Westpac at me because of the deals they had going at the time. Neither of their interest rates was close to what I could get by directly approaching a number of non-bank lenders.
Agree. Shop around with both. But if a broker can offer you a better deal, it's all very easy, they do all the leg work for you. Definitely explore the broker option, it worked for me.
Thanks for your posts guys. Definitely will have to educate myself more about whole process. Will contact some brokers to see what offers are available for me.
Feel free to drop me a PM if you have any questions about buying your first property or would like to me to send through some loan options.. I am a Perth based mortgage broker and always happy to give advice.
I'd certainly speak to a broker. I bank with CBA and their offer for my home loan was over 0.5% more than who I eventually went with. So it was well worth my time to use them.
Edit: PM me if you want the details of the Sydney based broker that I used. He was great and went above and beyond what I expected. I have no financial or personal interest in the referral, just happy to share.
ATM availability is important to some people. For example if you go with "Tiny Institution X" for your loan, but they don't have a convenient partner ATM near-by it can be a pain in the bum.
On the other hand, with the big banks this is never usually a problem.
Just purchased a house and went through a fantastic broker.
Hi Kennard what a broker can offer you is the same as the banks and visa versa (price wise). The difference is as a broker we have access to a wide panel of lenders (over 40 in my case), where a bank can and will only offer you their products.
The service of a broker is also free, so if you do have a bad experience you can walk away and go direct to the bank and it won't cost you anything.
Also as a broker its our job to do all the hard work for you, you just need to provide us the required documents and we liaise with the lenders to get the loan approved for you.
All the best deciding what to do
Peter
It's not 'free'. You pay for it through increased repayments. My broker cost me an initial commission (a couple of thousand IIRC + $60 a month).
Ultimately though you wont get a cheaper deal going directly with the lender in most cases.
Brokers can help you. Explaining and things like that. Also give rebates.
But you need to be fair, when broker help you, you also help them by staying with the same bank for two years at least so broker can earn a bit of money commision.