Mortgage brokers vs bank managers

Mortgage brokers vs bank managers – which is best for you when applying for a home loan or refinancing your current mortgage?

When applying for a home loan, the vast majority of Australians head straight for the local branch of their bank to speak with the bank manager or loans manager.

Why? Most likely it’s a combination of habit, familiarity and trust in the larger lending institutions.

Increasingly, however, Australians are seeking out the services of a mortgage broker. A mortgage broker works as a middleman between lenders and borrowers to secure financing for homeowners from a large pool of lenders.

They will recommend a suitable loan product for your needs and guide you through the entire process until settlement on your mortgage. A mortgage broker’s services are generally free as they will receive a commission from the lender who approves your loan application.

So, should borrowers in the market for a home loan or refinancing visit their local bank manager or seek out the services of a mortgage broker?

Using a qualified mortgage broker

1. Using a mortgage broker gives you a choice of many more loan options and expert advice on the best option for you.
2. With a range of lenders to choose from, if one knocks you back, your mortgage broker may be able to recommend another lender who may say ‘yes’.
3. A mortgage broker with your interests at heart will become your personal banker for many years, advising you as you move to your second or third home, need to access equity in your home or are considering investing in property.
4. Your mortgage broker will follow up through the progression of your loan application, keeping you informed and saving you a lot of time and frustration through what can be a time-consuming process.
5. If you have a tricky loan scenario, such as being self-employed or having a poor credit rating, your mortgage broker can assist you in presenting your ‘story’ in the best light to lenders.
   You need to shop around for the best mortgage broker for your needs and check they are fully qualified. A good mortgage broker will have industry experience and work hard to find the right loan for you.

Seeing your local bank manager

1. Your local bank manager can only offer you that bank’s products and interest rates to compare and choose from, so your options are limited.
2. Your own established bank may offer discounts on their advertised home loan rates.
3. As your own bank has access to a good deal of information about you from your accounts.
4. Bank managers are frequently moved around so it can be hard to establish any long-term advisory relationship.

So, choosing a mortgage broker or bank is up to your personal circumstances. At ALI Group, we have associations with experienced mortgage brokers who will not only advise you on whether you are ready to proceed with applying for a home loan and how to go about it, but can also offer you loan protection insurance to help guard your financial security against job loss, accident, serious illness or death* once your home loan is approved. For more information, please don’t hesitate to get in touch with the friendly ALI team today.

* Full details of cover by Loan Protection Plan are in our Product Disclosure Statement.

Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness, Living and Accidental Injury Benefits) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSG 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement when deciding if this product is appropriate for you.