Making a Decision
I’m constantly asked whether you should be using Banks or Mortgage Brokers and whether using a borker will actually get you a better interest rate compared to going directly to a bank.
I can answer this in a number ways, but I want to start with one key point. There’s a major reason why banks are making record profits and raking in between $6 & $9 Billion Dollars per bank each year. Don’t get me wrong, they really want to lend you money but its human nature that if they can charge you that little bit more they’re going to do it.
Before I go any further, I think it’s important for you to understand the way a broker works and how we are remunerated. We only get remunerated when we are successful. Human nature dictates that we will be willing to work harder to earn your business;
- To find the best product for you
- To get the best rate for you
- To have you clients for life
It’s very important that you understand there are also different qualities of broker. You need to make sure your broker is best in show. When you’re dealing with the biggest purchase of your life, you need to make sure you are being advised by the best person in the marketplace.
The barriers of entry into both broking and the financial industry are quite low. It’s very important that you’ve got someone educated working for you. Every broker at The Lending Alliance has a tertiary educated Accounting Background, with ongoing lending training. Very important, non-negotiable.
Comparison of brokers aside and not arguing about interest rates and getting the lowest interest rate in the market place there are many other factors that need to be considered when using a bank or a broker:
CHOICE – Brokers normally have access up to 30 different lenders on their panel. You’re not going to one bank and getting one lending product. You are getting up to 30 with only one phone call or meeting. Very important to have that choice, can the banks offer that choice to you? That choice is what allows us to source you the best product at the best possible interest rate.
CONVENIENCE – Getting in contact with a broker is far easier than getting in contact with your bank. Banks are closed at 4 or 5pm every day. Trying to get in contact with them after hours is impossible. I’ll throw it out to you, do you know the banks contact number? The branches contact number? Can you contact them after 5pm on a Friday? Very important to consider that if you’re going to auction on Saturday and you need to contact someone, that they are actually available for you. That is a major difference from using a broker vs the bank.
SPECIALISATION – Brokers have the ability to offer specialised assistance for various types of property finance. Complicated commercial and construction loans, to debt consolidation on a larger scale, bank branches simply aren’t trained to be able to provide for this. When you start needing something slightly off centre, is when your broker/client relationship will truly come into its own.
CONSISTENCY – Our research has shown us that the most frustrating thing about using a bank is that there’s no continuity of the person you’re dealing with. They may be there one day and gone the next. Relationship banking is dead. Not so with using a broker. The Lending Alliance has been here for over 10 years and we are not going anywhere. We have a relationship with you, and we want that to be ongoing. We want you to be our clients for life.
Building that relationship with the right Mortgage Broker can start at any time; you could be buying your first property or your tenth property, make sure you evaluate where you have been in the past to get finance, and think about who should be working for your best interests in the future.