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Banks vs mortgage brokers

I read that the Big Four banks are making just about all of the home loans in the country nowadays, so why should I go to a mortgage broker? Wouldn’t it be cheaper and better to go direct to the banks?

Not necessarily. The banks actually do a lot of business through brokers and some are so good that they can get 24-hour approval. The banks actually give some good brokers this service as they have a great record of submitting good applications. These people would have a great eye for knowing if a bank is going to accept you as a borrower. A great broker should know all of the loans at banks and elsewhere, though ‘elsewhere’ has shrunk in recent times since the credit crunch. But let’s face it, there’s still some competition between the existing or surviving lenders. There are different loans within the individual banks and a broker should be an expert on the rates, fees and conditions that go with loans. The broker’s job is to match you to the right loan and this means looking at all of the relevant options. Remember the Big Four banks, St. George and Bankwest are still advertising heavily for business and so a good broker can at least give you access to these well-known lenders. I always say go to two brokers and a couple of banks and see where the best deal ends up being. I reckon the broker will get your business unless you are lucky to get a great employee at a bank. A broker is often self-employed and wants to create a long relationship with you and that’s why they can be great for loans but there are some exceptions. If a broker gives you the creeps, cancel their ticket. Go to the MFAA website for tips on dealing with brokers.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice. 

Published on: Wednesday, April 21, 2010

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