When you needed a home loan in the past, you went to your neighborhood bank. But things have changed.
Finance can now be arranged through a mortgage broker or a comparison site. So, which is the better option?
Banks
Let’s say you’re going to your bank to get a home loan on a house for sale. The significant drawback is that your bank will only tell you about its own products, even if it knows that the bank down the street has a better deal for someone in your situation.
Don’t be tricked into thinking that your bank would reward your loyalty with a lower interest rate on your house loan. Banks don’t believe in loyalty. They believe in making money.
Brokers
Mortgage brokers operate with a panel of lenders, which could include anywhere from 10 to 40 large banks, regional banks, mutual banks, credit unions, building societies, and non-bank lenders.
That means they can shop around for you to locate the greatest house loan for your needs.
Another reason why many use brokers is that they guide borrowers through the complicated mortgage process, offering advice and managing the application.
Furthermore, most brokers do not charge for their services (as they collect a commission from the lender after the home loan has settled).
However, there is a disadvantage to employing mortgage brokers: they will not inform you of the lenders who aren’t their partners.
Comparison sites
Comparison websites, in general, provide the most options. They may include house loans from over 100 different lenders of all sizes and forms.
Another benefit of using comparison sites is that they make it simple to sort and filter results based on a variety of criteria, such as interest rates, fees, loan types, loan features etc.
As the name implies, comparison sites can be an excellent resource for comparing home loans.
Comparison sites, on the other hand, can be perplexing to use because they may promote lenders that pay for visibility while excluding others who do not.
You’re also on your own once you’ve found a home loan — there’s no mortgage broker or bank employee to guide you through the process (although you can contact the lender for assistance).
