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Mortgage Brokers vs Direct LendersAs you probably know, mortgage Brokers represent a variety of different lending institutions while Direct Lenders represent only the products and services available from their own institution. In theory, mortgage Brokers would seem to be a better place to begin your search for the best deal you can get on your mortgage since they have more offerings from which to choose. In practice, this is not always the case. First, you need to be aware that mortgage Brokers are in effect middlemen, and as such they are paid a commission by the lending institution for every loan they steer their way. While many brokers – especially online brokers – claim their data base contains all available mortgage products, this can be at best misleading, and at worst, completely untrue. Some will only show products from direct lenders that pay them the highest commissions; typically the big Australian banks. So why do so many people use mortgage brokers? In a word: convenience. Brokers will present you with alternative options from which to choose and frequently manage the application process from start to finish. If you have the time and are willing to put in the effort, you might find a better deal by researching direct lender mortgages. Remember, in many cases eliminating the broker middle man can save you a lot of money. Although we are not endorsing these sites, here are two different Australian mortgage education and comparison sites where you can begin learning about the market and available mortgage types. The first is www.canstar.com.au. This site is actually a complete personal money management site so you will also find helpful information here about car loans, insurance, savings accounts, and even online investment and trading accounts. The second site where you can begin your search is www.amohomeloans.com.au. This is a classic broker site so learn as much as you can there and then decide for yourself. We highly recommend that you take the time to meet with some direct lenders, especially through your own bank, to compare their offerings with what you may have uncovered through the brokers. There are online direct lender sites you can check out as well. Good luck! |
