So you’re looking to buy a house, and you want the best mortgage deal you can get. Do you go direct to the banks, or use a mortgage broker?
Here’s our take on what the differences are and how you can get the best deal.
You can get a mortgage directly from one of the many banks we have in New Zealand. Whether you go through a broker or directly to a bank, your loan will be with the end bank. You can also get a home loan through other lenders like finance companies and credit unions, but for now let’s just focus on big banks.
The advantage of going with banks is they usually had a wide range of mortgage products to choose from, and you can negotiate banking costs and loan application fees. Banks can also offer discounts on insurance, or even contribute to some of your legal bills, which can save you thousands of dollars in the short term. On the other hand, banks are also more cautious, and you may find it harder to get a loan if you don’t have a good credit history. If you plan on shopping around at different banks, this could become time consuming and frustrating!
This is where mortgage brokers come in. A mortgage broker doesn’t actually lend money, they just help you find a good deal by running around on your behalf. Unlike banks, mortgage brokers can find you the best deal from many banks (and other finance companies). Brokers already know the interest rates and application process with different lenders, so they can help you navigate the paperwork, as well as leverage their existing relationships with the banks to help get you better rates. Lastly, if you are struggling to get a loan from the bank due to bad credit ratings, brokers can usually provide some advice and even approach other lenders to try and get a loan for you.
So at this point you must be thinking that going with a broker is a no brainer, but is there a catch? Nope! And best of all, brokers won’t charge you a cent! They make their money from commissions that banks give them.
At the end of the day getting a mortgage is a pretty big financial commitment. Choosing a broker or a banker that you have a good relationship with, or are prepared to develop a good relationship with is very important. If you already have an established relationship with a banker then it might pay to haggle with them. For the rest of us, we’re almost always better off going with brokers.
We at PocketWise have partnered with some of the best mortgage brokers in New Zealand to help you realise your dream of owning a home. Enquire with us to see what we can do for you – zero cost, zero obligation, just a friendly chat to understand your needs.
Cheers,
The Pocket Wise Team