When one is looking for a home to buy, there are two ways where he can get some financial aid. It is on the buyer to choose the best option according to the given circumstances, and each source could impact differently on the buyer based on their credit score.
Hence, one must make it a point to get a quotation from both sources and compare them before going forward. The main aim is to find the best rates at the lowest fees in the loan.
The Types of Financial Aids Are as Follows
The bank, also known as the direct lender
The banks are known as the direct lenders because these financial institutions are the originators of money lending and processing. Are you confused? In other words, if you approach the direct lender, you are directly obtaining the loan from them. These are the following types of direct lenders:
- Credit unions
- Mortgage companies specializing in home loans only
A mortgage brokers
This source of financial aid comes is not direct. A mortgage broker is like a middleman, which helps you find and match with lenders that are best for your requirements. They do the hunting task and lookout for lenders on your behalf.
Hence, it is essential to choose the best mortgage broker Melbourne based. For instance, work with the various direct lenders and several mortgage companies. Thus, they have the latest updates and knowledge in the industry. Hence, they are able to advise you best with the proper guidance.
How Do These Financial Sources Impact Your Requirement?
The impact is calculated on the basis of your needs. Let us say, for example, if your file is sincere and straightforward, you will be able to save both money and time with a bank. Thus, one should make sure the credit, assets, and income is constant and strong when approaching the bank.
However, banks do not disclose what they obtain on your loans. Hence, you may end up paying more if not observed the procedure closely.
Moreover, the mortgage companies that specialize in home loans; also implement the same procedure as the bank. Thus, they are categorized together. The only difference is that these companies do not offer other financial services. Such as operations of savings accounts, credit cards, and etc.
On the other hand, say you are facing challenges in your mortgage application, for example, a poor credit score or a low-down payment; then a mortgage broker can come in handy. They know of lenders that work on flexible terms too, meaning, they will be lenient with your application.
However, one must remember they are not limited to only opt-in for one type of loan lender. As mentioned above, they can tap both parties but only move forward with the one that is benefiting them.
The Pros of direct lenders
You are in total control of the application procedure, meaning there is room for negotiation.
The Pros of a mortgage broker
It is transparent. The broker’s commission is also mentioned in your closing statement.