This is a common and excellent question for a first home buyer (or any property buyer) to be asking. When it comes to real estate, finance is everything. It doesn’t matter how great a property you find - if you don’t secure finance, you can’t buy your home (unless you’re a cash buyer of course, but that’s a whole different story).
In short our answer is almost always go with a Mortgage Broker. Here’s why:
1. Unfortunately banks no longer work on relationships.
A computer and a series of rules will determine if a lender offers you a loan or not. If you go directly to a bank, you are limiting yourself to a single option and increasing your likelihood to be turned down in an application, which is not great for your credit rating. When working with a top broker, they’ll be informed on what each lender looks for and will help you apply for a mortgage from a lender whose criteria best fits your circumstances.
2. By not using a broker you will more likely be putting yourself at a significant disadvantage when it comes to qualifying for home finance.
Most brokers have access to over 40 lenders, each with unique lending policies, income requirements, deposit requirements, interest rates, and product fees. If you are only going to visit your own bank when applying for a home loan, are they going to tell you if the bank across the road has a better deal for you?
3. It will cost you nothing
Normally a broker will not involve any out of pocket expense. And, an additional benefit of a broker is that they will work with you to help you meet the criteria requirements should you not already meet them e.g. weeks or months of changed spending, or reductions in credit card spending etc. Whereas, if you apply directly with a bank, they are more likely to just give you a simple yes or no response.
HOWEVER, NOT ALL MORTGAGE BROKERS ARE CREATED EQUAL…
So you need to find an exceptional mortgage broker who specialises in First Homes and New Homes.Do your research and find a broker who works predominantly with first home buyers and people who buy new homes. There are a lot of options available to first home buyers that are not available to other buyers, however in many cases your broker needs to know about these options and apply for them on your behalf. A broker who spends all day every day working with customers just like you will always deliver you better outcomes than a broker who works with existing homes being bought by experienced home buyers.
For more tips and tricks that will help you get into your first home sooner (and ensure you buy well), download our FREE comprehensive 10 step + 68 tip Guide here.