Using mortgage broker vs. applying directly to the bank ?

Hi Henry

An article was written by Medine Simmons on this exact question in a recent edition of Your Mortgage magazine. I've pasted it below.

She offers the following five arguments as to why every borrower should seek out a qualified mortgage broker when trying to obtain property finance:

1. Choice

“The biggest advantage of a broker over a bank is choice,” she says. “When you sit in front of a broker you are sitting in front of 10+ banks and 50+ products versus visiting a banker who has access to only one bank’s products. This is especially important at time like now, when the banks are saying ‘no’ more, and by having more choices you’re likely to get a ‘yes’.”

2. Experience

Ask your lending manager how long they’ve been helping people with home loans, Simmons suggests. “Brokers often own their own businesses and are committed to their clients in the long term, with many years of industry experience,” she says. “Banks are big companies; they move their staff around and reward good performers with promotions away from their customers.”

3. Specialisation

If you’re looking for specialised assistance with your loan, it pays to talk to a specialised broker. “For example if you’re starting property investing, look for a broker who specialises in property investors. Bank staff often don’t have the training or experience in one area, but service whoever happens to walk in to the branch,” Simmons says.

4. Follow Up

Following up the progress of your loan application is time consuming and frustrating. A good mortgage broker will have a system for chasing you up, keeping you informed and saving you time.

5. Personal Banker

Your mortgage broker is “like the perfect personal banker,” Simmons says. “They know what needs to be done, they make sure it happens and because it’s their own business, they’re in for the long haul. Bank staff change often so even when you find a good personal banker they change jobs before you know it.”

Totally agree with Terry.

Most Bank employees have little or No knowledge of investment structures, loan planing etc.

You find them giving out advice to clients yet they havent even paid off their home loan let alone purchased their 6th investment property.

Ask youself will your Bank Manager hang around because you are his client or will he take the first promotion going and forget you even exist. If you think the former you having yourself on.

Cheers

Yours in Finance

Always???? I don't think so. I've had better outcomes, especially with development loans, going direct. All 5 points you have mentioned can be achieved by ones self when armed with a bit of knowledge.

Hi Henry

You can have multiple loans with the same lender and not have them crossed collaterised.

Cheers

Jamie

But of course the mobile banker can only tell you how good their product is and certainly wont tell you that you could do better up the road.

With a good Broker like Jamie you get the wealth of knowledge across all lenders and would end up with a better overall deal that merely going to 1 lender.

Of course also remember as an investor the lowest interest rate is not the sole consideration. It may well be the only thing a Banker wants to force down your throat but there are 101 of other features such as serviceability, top credit policy, LMI etc etc etc to look at.

Cheers

Yours in Finance

Wendy Higgins is the first Broker to have completed $1Billion worth of loans in Australia so yes certainly comes well recommended.

Course with that number of deals you dont always get to see Wendy but one of her many staff.

I get it is like anything some Brokers like Bankers / Mobile lenders dont have a clue, dont care and unfortunately tars the brush of the whole indusutry.

Cheers

Yours in Finance

Good old Wendy Higgins — $1B in loans…and is expected to hit 1.5B in 6 years time – she hires 5-6 brokers…so i guess it’s a joint effort??- still a massive achievement!!!!

twothings – sorry to hear about your story with the first broker.. hopefully his/her is no longer in the industry.

One thing about the MB business like any business the “workers” tend not to care to much; it’s only a JOB to them….however when you deal with the principle/owner of any business there reputation is on the line…

So end of the day it’s not about should i go to the bank or a MB?- it’s more about the people….WHO is a good MB/branch manger. You can have great companies but the people you deal with will determine your result.

Regards
Michael

ahah i read her story in the recent MFAA magazine + met her twice a few years back both at a CBA conference …

But dame she is a beast….she does the work of 5 ppl LOL!
The stress, paper work and time to write 50 loans per month (solo) is CRAZY!

Regards
Michael

imagine the trail after 5 years. 15 years…….

For my first home I didn’t like brokers, so I went to all the banks and done my own research. Then I moved house and my wife and a friend convinced me to use a recommended broker. I wasn’t very happy and after a few meetings I liked the idea, so the outcome was very positive. Then I bought an IP and he did all the paperwork, I only contacted him with the realestate and they organised everything, I just sat at home and signed the pages I needed to by email. Great experience.
I’m in Perth

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Mosqui