Should I use a mortgage broker or go to bank directly?
When you think about applying for home loan in New Zealand, the two most popular channels you approach are banks (including branches, mobile mortgage managers) and mortgage brokers. The choice is yours.
Is it worth getting a mortgage broker? Should I use a mortgage broker? Do mortgage brokers get better deals?
In New Zealand, about 40% of home loans are written by mortgage brokers, and this number keeps growing. Here are the pros of using a mortgage broker in New Zealand:
- Mortgage brokers are not bank employees. Their job is to work on your behalf to find the best possible finance solutions to help you achieve financial goals. Unlike bank employees, who receive a salary (plus bonuses) for writing loans for that lender only, and they have sales targets.
- Mortgage brokers like us work with approximately 30 lenders, and some lenders work exclusively with mortgage brokers, which means, if your bank declines your loan application, we are more likely to be able to help you.
- Getting a good home loan approval outcome is not just about number or calculations. Lots of other things go into it, such as loan structure, legal structure, borrower character, repayment risk evaluation etc. Good mortgage brokers have the ability to package your loan application to improve the chance of approval or get better outcomes, such as fewer approval conditions.
- Mortgage brokers like us are advice focused, not transactional (unlike robots and banks). Although we only get paid by the lender if your home loan is settled, we spend considerable time (free of charge) during the consultation stage trying to help you become a qualified borrower sooner. We also hold your hand throughout the application process to help you remove any roadblocks and answer questions. Banks normally give you either an approval or decline outcome. There is nothing in between.
- Mortgage brokers do all the legwork for you to evaluate lenders and loan products to ensure you have the best possible solution and price (interest rates and cash backs) and can save you the time and money with all those daunting details. Good mortgage brokers will continue service after loan settlement because it’s very important that your home loan and financial circumstances are reviewed regularly (at least every two years) to ensure they are still meeting your individual needs. Not putting it away and forgetting about it for the next 25 or 30 years.