With so many banks and lenders to choose from, not to mention the requirement for a variety of documentation to be prepared and presented to potential investors; applying for home loans can be a very scary time for applicants. There are two main ways to apply for mortgages, with the first being to approach lenders personally and the second being to rely on the services of brokers.
But what are the main advantages and disadvantages associated with both options? Here’s a closer look at the possibilities and what they mean for new applicants.
The truth about personal applications
Although the majority of people will opt to apply directly to banks without the aid of brokers, it’s a well-known fact that many of these applicants will face rejections. The reasons are wide and varied, from failing to prove financial earnings, all the way to the agent finding cause to doubt that the person will be able to meet their repayments.
That isn’t to say that these applicants can’t be successful, in fact as long as all paperwork is in order and every element has been properly prepared for, there’s no reason why a potential lender should reject the application.
Relying on a broker
The job of a broker is to take care of the negotiations, handle all documentation and correspond with banks and lenders to find the cheapest deals for their customers. This already puts the applicant at an advantage, as the hard work will be taken care of with minimal fuss. As most brokers will already have established a relationship with potential lenders, they will typically be able to go directly to the deciding body – promoting the chance of being approved for a loan.
Pair this with the fact that many brokers take their fees from the investor (in the form of commission) and the entire hiring process becomes an affordable and effective one that boasts much higher results than applying individually.