There are various ways to get a mortgage, but let’s focus on two main aspects of the process: mortgage brokers and banks.
Mortgage brokers work as middlemen between mortgage lenders and homeowners, securing financing on the wholesale level. Banks provide funding directly to homeowners on the retail level, called consumer-direct lending.
So, which of the two is better?
The Broker’s Main Advantage over Banks
In a nutshell, mortgage brokers can make it easier for you to get a mortgage.
Banks have rigid requirements and processes to acquire a mortgage. Brokers also have their own requirements and procedures, but they are more flexible and can be applied to a wider variety of situations.
Banks work with various lenders that can provide mortgage financing, while brokers commonly work with only a few mortgage lenders. As a result, it takes longer to complete a bank’s mortgage process than a broker’s.
Brokers generally also have lower fees and costs than banks, making it easier for you to get a mortgage for a given price.
The Bank’s Main Advantage over Brokers
Banks can offer mortgage refinancing and home equity loans at better rates and terms than many mortgage brokers.
Just keep in mind that a bank’s rates and terms are determined by their policies, not the current rates and terms of the market. A wide selection of mortgage broker rates and terms is available to you if you decide to seek out a broker instead of a bank.
Bank rates tend to be quite competitive, but brokers can offer even better rates than those of some banks, especially if you have decent credit. It’s more challenging to estimate the cost of a bank because the rates vary based on several factors.
Choosing a Mortgage Broker vs. a Bank for Refinancing
While your best bet for a mortgage refinance is almost always going to be a broker, the decision to go with one over the other is not a no-brainer. If you can get a better rate and terms from a bank, then, by all means, go ahead.
The deciding factor will be whether you can find a bank that offers a better rate and terms than a mortgage broker. There are actually lots of great banks out there today, but you’ll need to stay on top of the market to be sure to find one.
If you’re in the market for a mortgage refinance using a broker, check out our list of recommended mortgage brokers.
How to Refinance a Mortgage
Getting your first mortgage is a complicated process. However, refinancing your existing mortgage shouldn’t be any more difficult. When you refinance your mortgage, you’re essentially getting a new mortgage on top of your old one.
Your new mortgage lender will look at your current financial situation and evaluate your ability to pay off a new mortgage. If everything looks good, you can get approved for a new rate on your mortgage.
Conclusion
Both banks and mortgage brokers can help you refinance your existing mortgage. You’ll need to decide for yourself what the best approach for your situation is. Stay on top of the mortgage market and find one that provides the best possible price.
Mortgage Broker Home Loans is for clients around Mornington Peninsula. We are happy to give you a free, no-obligation quote for your new mortgage requirements, offering you the best value loans from a range of lenders. This means that when we deliver a solution for you, you know that it is the best possible deal available on the market. This will save you time and ensure that all the legwork is done before proceeding with this big decision. If you need home loan refinancing for healthcare workers in Frankston, get in touch with us today!
