If you’re considering a home loan, your first thought is probably that you need to get in touch with a mortgage broker. But what does that actually mean? What are the main differences between mortgage brokers and mortgage lenders?
A mortgage broker will go out and get you the best interest rate for you and then broker it for you, where a mortgage lender will take the decision on your behalf, usually by telephoning you or calling you back. And in fact many times you can have your mortgage broker call your lender directly.
So is there really such a thing as a mortgage broker in Invercargill? The answer is no. So is it still advisable to use a home loan broker.
Mortgage brokers will generally charge a small fee for their services. The idea is that it will save you money.
First you can search online for yourself and find a lender who is willing to give you a loan through your own high street bank. With your personal details in the hands of the mortgage lender, they can put you in touch with a mortgage broker. Mortgage brokers will then contact your bank to get you a loan approved for you, giving you the best deal.
But what if you can’t get a loan through your own bank or credit union? Well you can ask them to help you out by supplying you with a ‘debt counsellor’ who can give you their recommendations, which may include looking into a ‘deposit shrinker’. The problem with this is that you might end up paying for them to do this.
Mortgage brokers often use this system by finding low rate mortgages that are not widely advertised. They then work with the banks to get you a loan, but in the meantime they make money on the fees that they charge.
But is it really wise to use a mortgage broker in Invercargill, New Zealand? It depends on your circumstances.
The main problem with using a home loan broker to get a loan is that the brokers only use them to sell to. Their income from commissions means that their advice is biased towards those that they want to sell a loan to. This means that if you are unable to get a home loan from your bank because they don’t want to sell to you, they will offer you one from their competitor.
When you use a house loan broker, you have no choice but to get what they recommend. If you don’t believe them, you are on your own. You will end up paying for what you did not ask for.
So to answer the question – do you need a mortgage broker in Invercargill? Only if you need to finance your dream home in New Zealand. If you are already in the process of buying your own home, using a mortgage broker is not for you.
It’s simply not worth the effort and expense. Even if you don’t think you need to finance your home, you will be better off without one. Find out more about mortgage brokers in Invercargill like APM Finance and how you can avoid them.