3 Differences Between a Broker and a Lender

Broker vs Lender

 

It’s easy to walk into the local bank and talk to a lender, or apply online for a home loan, but it may not always be the best option.

1. Choice

When you’re buying a house, do you go to one real estate agent, decide you will buy a house from them, and choose from what they have on the market? Do you make the best of what may actually be a poor fit for your circumstances? No? Of course not – why would you limit your choices in this way?

It’s really no different with the loan you use to pay for that home. Every lender, including the big four banks, second-tier lenders and specialist lenders, offer different products with different features, some of which will suit your goals and lifestyle, and some of which will not, you may qualify with one lender and not with another. You don’t want to risk ruining your credit score by applying with one lender then getting declined based on information that a broker could have advised you of prior to submitting an application.

2. Industry Expertise

Your broker will use their expert industry knowledge to help you sort through loan products and, unlike a bank lender, can find the product that is the most suitable for your needs.

You can expect, when it is time to make a decision and settle on one, that your broker may offer two or three alternatives that would all be suitable, with a recommendation for one product in particular that stands out.

3. Commission

Of course, brokers earn commissions. This doesn’t mean your broker is not on your side. Whether you see a broker or a bank lender, that person in front of you earns money by selling you a home loan. The difference, then? The bank lender is there to sell you one of their loans. The broker is there to help you locate a product from a choice of lenders that works for you so that you come back to them when you’re thinking about refinancing, and so that you are comfortable recommending them to your friends and family.

If you would like to speak with a broker, contact us today.

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