Is It Better To Deal Directly With The Bank or With a Mortgage Broker?

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If you’re in a good situation with lots of savings and a good income is it better to deal directly with the bank or with a mortgage broker?

Ryan: Tina’s asking, “Hi. If you’re in a good situation, e.g., lots of savings and a good income, to get a loan would it be better to deal direct with the bank or would you use a mortgage broker?”

Ben: 100% a mortgage broker.

Ryan: Yeah. Well, but then the thing is as well, so mortgage brokers are great because mortgage brokers can look at the entire range of the lending market, however many lenders there are these days. How many is there now? 30 or something like that? Maybe even more.

They can look at all of those, they can assess your situation and what you qualify across all of those.

They can look at a lot of different interest rates, a lot of different loan types and things like that to work out what’s best for you, but then, again, not every mortgage broker is great, so just because mortgage brokers are generally better than dealing directly with a bank, you’ve got to find a good mortgage broker as well. There are some rare situations where dealing with a bank can be better.

I’m interviewing a guy, this is a year or couple years ago now, and he had a personal relationship with the bank that he was with. I don’t know how we was doing it.

I can’t remember, but he had some sick lending situation going on that would just allow him, I think he purchased 27 properties or something like that, so it allowed him to get over the barrier of the amount of properties he could buy, so in that specific situation it was better for him to work directly with a bank because he couldn’t get that through a mortgage broker, but yeah, for the general person.

Ben: The problem with that, and what that guy’s not telling you is every single one of those properties is price-secured and collateralized, and if the house of cards falls, they’re going to take every single one. I get where he’s coming from, and in the right time of the market, 27 properties sounds awesome, but one bank that just sounds like absolute death to me.

There’s a rule with APRA recently where one bank might only lend most individuals earning a regular income under 200k of about 1.5 million dollars, and after that, they’ll start saying no, so again, just because you’re getting a no from your current bank doesn’t mean that a broker can’t go to a first, second, or third tier lender and help you get across the line at the moment as well.

Ryan: Yeah, so yeah. I think that settles that one. We both recommend mortgage broker. Obviously it’s up to you what you go with, but yeah, there’s some definite benefits to mortgage broking or to going to a mortgage broker.

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