Mortgage Company Vs Bank For Home Loan – Everyone knows that they can go to the bank to get a home loan. If you approach a bank to inquire about a home loan, you will be advised to speak with the mortgage staff, who should promote the loan offered by that particular bank. For example, DBS mortgage staff will only recommend packages offered by DBS.
Mortgage brokers help their clients get the lowest interest rates by comparing home loan products from different banks. As independent advisers, they don’t work for any bank and are relatively free to recommend the best deals to be found anywhere.
Mortgage Company Vs Bank For Home Loan
This leads to greater flexibility and a wider range of options, which is a big advantage for mortgage brokers over banks. Often, a mortgage broker can help you secure a lower mortgage rate.
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Mortgage brokers and loan managers who work in banks work very differently. Knowing some of the differences can help you make a more informed decision about which approach to take.
Many mortgage brokers have an online presence to build their customer base. It also benefits potential clients who can easily verify our broker’s knowledge and track record through customer reviews and social media features. This will give you some assurance as to how experienced and trustworthy the individual broker is.
If you go directly to the bank, you will likely be assigned a random mortgage officer. Even if employees receive a certain standard of training from the bank, you cannot verify their skills or professional level in relation to mortgages.
Because mortgage bankers are employed by banks, they often receive a base salary and commission on the deals they secure. The amount received through commission largely depends on the interest rate offered and the features of the home loan package. Therefore, mortgage bankers may have a disincentive to help you find the absolute lowest rate, or they may be reluctant to tell you about the full set of special features offered on your mortgage because your best option generates a lower commission for them.
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Meanwhile, mortgage brokers earn only from fixed commissions, which depend on the size of mortgage loans, not on interest rates or features. This way, they can help you find the best deal without any conflict of interest.
Unlike banks with more financial resources, independent mortgage companies have a strong need to maximize revenue from all the customers they acquire. Hence, they are highly motivated to ensure that all the advice they give about home loans is reliable and insightful.
One of the ways they do this is by deliberately trying to get to know their customers better. This opens the door to discussions about other financial products, such as insurance or investments.
Instead, loan managers are hired to sell mortgage products to banks. They may be more interested in simply closing the deal and moving on.
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Mortgage brokers have a more direct relationship with banks than with the public. Some mortgage brokers may even be former mortgage bankers with years of experience in the banking industry. Because of this direct relationship, brokers can usually get better home loan interest rates than the general public.
Sometimes, mortgage brokers may claim preferential rates from a particular bank because of the volume of business they have generated for the bank.
Mortgage brokers have a good view of the market and up-to-date information on changing interest rates. Because banks often offer lower rates to gain market share, mortgage brokers know when these rates are offered and can recommend the best option at any time.
Since there can be more than 50 different home loan packages offered by all the banks in Singapore at any given time, approaching the banks one by one and comparing their options can be time-consuming. Hence, mortgage brokers make choosing the right home loan a quick and easy process.
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ROSHI’s loan marketplace allows borrowers to get fully customized mortgage solutions, real-time updates and strategies directly on our platform, avoiding the hassle of calling, visiting or applying to multiple banks or traditional mortgage brokers.
As mentioned earlier, mortgage brokers do not represent one bank and may recommend packages at different banks. Mortgage bankers, on the other hand, can only recommend the best packages offered by the bank they work for. Of course they will try to sell it as the best on the market, but you should take it with a grain of salt and do more research on your own.
For any loan (not just a home loan), a common pain point is the amount of documentation required. Through this process with different clients, mortgage brokers get to know their needs.
A mortgage broker who knows your financial situation well can act as a consultant to quickly break down the most important details and the appropriate forms to fill out. For example, a salaried, self-employed borrower does not have to fill out certain forms.
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Failure to meet the 60% loan service ratio requirement can cause brokers to spot common red flags early and reject you. They can then provide advice on best management practices.
For example, a lock-in feature (ie a penalty for refinancing your home loan) may seem like a bad idea, but it can mean lower rates, especially if you don’t intend to refinance for years.
Refinancing your home loan means transferring your home loan from one bank to another bank. Borrowers can choose this if a better rate is offered elsewhere that is not available at the time of borrowing.
However, refinancing is expensive – at least $2,500 in legal fees. They also risk switching to weaker packaging, which will lead to higher prices.
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Some other home loan packages may have a free re-rate feature, meaning you can switch to another package with the same bank at no extra cost.
Banks are always offering new types of features. A mortgage broker can explain which features best suit your specific needs.
Even if you took out a home loan years ago, a mortgage broker can be helpful. You might think that there could be cheaper loans on the market today.
In this case, the broker can help you switch to another bank loan, which will help you lower your monthly payments. They can help you deal with refinancing costs, negotiate full coverage of your costs, and plan the best time to refinance. They can help with the necessary documents.
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A legal entity is involved in all property transactions. The attorney will review the deeds and documents, such as the sales contract and the background of the seller.
Mortgage brokers have a network of connections because of their first-hand experience working with law firms. Thus, it can help you find a reliable kidnapping law firm with a reasonable fee, which varies from $2,500 to $4,000. Finding a reliable foreclosure law firm is important because any mistakes in your mortgage documents can have financial implications. Procrastination.
The loan-to-value ratio (LTV) determines how much a bank can lend on your home. It is a complex calculation based on various factors like age, loan tenure, credit history and the outstanding amount of the home loan.
The mortgage broker only gets paid when you get a new home loan from the bank. So if you already have a mortgage, want to stay with the same bank and want to change your package (aka re-price), the broker won’t help you. Even if this is not your best option, the broker may refer you to refinance with another bank.
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Conversely, if you want to lower the interest rate on your existing mortgage, the best approach is to ask your bank for a re-pricing offer before approaching a mortgage broker to consider refinancing.
Use a mortgage broker for free! Your mortgage broker is paid by the bank that issued the loan, so you don’t have to hire a broker and pay any fees.
You can be sure that all banks offer fixed commissions to mortgage brokers, so your broker is unlikely to choose any bank.
Some home loan brokers may offer you exclusive rewards because they don’t face the same operating costs as banks.
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Given the many benefits of joining a home loan broker, the service is free
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