Today, technology has brought many changes, especially when it comes to financing. So why is there still a demand for mortgage brokers?
We can simply browse the internet, comparing the many bank offers and pick what we think is best, call to make an appointment and, finally, go to a branch to fill up some forms. It certainly sounds easy and doable for the busy professional.
Let’s be honest. Bankers earn a commission when they sell you a home loan offered by their own banks, not from other banks. You are not going to hear a DBS banker saying that OCBC offers a better rate. Every banker will tell you they are offering the best rates in town.
So what advantages do you get when you go to a mortgage broker?
Mortgage brokers save you money.
Believe it or not, the primary job of a mortgage broker is to save you money. He compares home loan packages, reads the fine print and picks the cheapest loan available. A bank might advertise that their home loan package has the lowest interest rates, but low interest rates usually come with special conditions like a high minimum loan amount. In addition, a mortgage broker typically charges nothing for his service. He gets a loan referral from the banks.
Mortgage brokers are not biased to any bank.
Mortgage brokers don’t sell houses or loans. Their sole product is information – information about the various loan packages across all the banks. And his most important asset is his reputation. He gains nothing from picking a bad loan or lying to his customers.
Bankers, on the other hand, get their bonuses by convincing you that their loans are the best, even when they are not.
Mortgage brokers understand the market.
Most mortgage brokers used to be bankers themselves. They are specialists with information about the hundreds of mortgage and loan packages across many banks and they are well versed with the loan process. They ensure your documents are in order, so your loan application is fast and smooth.
Besides the one-time effort to help property buyers secure the best home loan, they also help home owners keep track of their loans and alert them to refinance their home loans when the time is right.
Mortgage brokers can help you negotiate a better deal.
You should never take a bank’s advertisement as their best offer. They can usually offer something better, provided you have a good relationship with them and the nerve to ask for a better deal.
Never, ever accept a first offer, and always ask for better terms. Negotiate or be eaten alive! If you receive a better deal from Lender A, always go back to Lender B and see if they can match it. After all, each lender is peddling the same product – money – so it doesn’t matter where it’s coming from. Mortgages are designed to be haggled over, and not to do so is the equivalent of burning money in the street.
You are leveraging off their industry knowledge, network, and partnerships when you engage a mortgage broker. Mortgage brokers know bankers by name; and, being former bankers themselves, they can bargain in ways you cannot.