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Thread: mortgage broker vs banks?

  1. #1
    Join Date
    Aug 2008
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    Wlg, NZ
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    Default mortgage broker vs banks?

    hi there

    my husband and i are looking into buying our first home and obviously, we are complete noobs at this. is it easier to deal with a mortgage broker (and i learned they do not charge us for their time) or is it better going to shop around banks?

    is there a website about mortgages which would make my life easier? looking at different websites about mortgages/home loans/buying vs renting is making my head spin!

    thanks.

  2. #2
    Join Date
    May 2009
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    Gorleston-on-Sea
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    Quote Originally Posted by Jalapenocheese View Post
    hi there

    my husband and i are looking into buying our first home and obviously, we are complete noobs at this. is it easier to deal with a mortgage broker (and i learned they do not charge us for their time) or is it better going to shop around banks?

    is there a website about mortgages which would make my life easier? looking at different websites about mortgages/home loans/buying vs renting is making my head spin!

    thanks.
    Hi there, I am an independent mortgage consultant in the UK and have just been out to NZ with my family filming Wanted Down Under with the bbc, part of which was time spent as work experience with a broker in Chch. Speaking with my professional hat on, I think that it is always worth going with a broker but check out their fees and charges prior to discussing the mortgage.

    I found that they normally tend to deal with the mortgage and not the associated protection products that go hand in hand with it. In the UK your broker would arrange everything for you.

    Ensure that they are able to offer you a choice of products that are a representation of the whole market. Don't be afraid to ask about the commission that the broker will receive from the lender as this will normally be how they get paid.

    Banks will only be able to tell you about their own range of products and unless you want to visit every bank on the high street you will not get a true idea of what options are available to you.

    As you have found out the web can be confusing and the product rates will vary depending on deposit you can put down, the term of the product, are you going to fix the rate or go for a tracker..........................

    If you can let me know where are you based I may be able to put you in touch with an experienced and reputable broker.

    Best regards

    Andrew

  3. #3
    Join Date
    Dec 2007
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    Stanley Bay, Auckland, NZ
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    When we bought our place we went to the banks directly and then negotiated with our bank to match the best deal we could find. I also talked to a mortgage broker that my parents were using to buy a flat at the same time and their deal came out more expensive than going direct.

  4. #4
    Join Date
    May 2007
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    If you want to compare rates with mortgages then check out www.interest.co.nz

    Also, worth checking out if there is any relationship with your work to any of the banks e.g. if you work for some organisations such as Capital & Coast DHB then they will give you a preferential rate.

    It was also possible to negotiate a better deal with the banks than they would normally publish - don't know if you still can but always worth asking.

    Ian

  5. #5
    Join Date
    Jan 2010
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    Melbourne-Wellington 2011
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    Personally i would go with a broker everytime. They suit the loan for you and many brokers get their payments/commissions directly from the banks after your loan application is excepted. Any hiccups you may have,they can also smooth over before you send in your application which gives you a much better chance of being successful.

  6. #6
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    Jul 2007
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    Christchurch, New Zealand
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    I've spoken directly to banks as well as one mortgage broker and find the broker experience a lot better. As you've mention you don't pay any fees to the broker and they earn their commission from banks, so it appears that you'll have nothing to lose by going with a broker.

    The broker I spoke to is keeping me updated with the latest news regarding interest rate changes from the various banks as well (in case you are considering switching banks in the middle of your mortgage to take advantage of lower rates etc) and that's a great service she's providing.

    I'd say to go with the broker.

    I've also recently switched my motorcycle insurance from dealing direct to going through a broker - better rates, same company and coverage, same terms. It's weird that by having a middleman earn commission you get to pay less, but that's exactly what it is for me at the moment.

  7. #7
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    I always do both - contact a broker, and do my own research.

  8. #8
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    Jul 2005
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    We used Squirrel mortgage brokers and they were excellent as a first time customer, they had no charges (I think they may do after the first time) and if over a certain size of mortgage they pay for a home inspection report free as well. They match any rate you can get also.

    Be warned though that some banks are refusing to deal with brokers any longer, as they see it as giving away margin.

  9. #9
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    not all banks deal with brokers so the dual approach will give you a better idea. banks will look to move on rates to get the deal also. as an ex broker (uk) who now works for a bank (nz) i think all have something to offer.
    brokers can work from panels which is not whole of market. in nz, regulation is different and lenders will discount rates to obtain insurances.

  10. #10

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    Do your homework is probably the best advice. I used a mortgage broker, but i prefer that type of service. Like it is advised above not all banks pay commission and as such brokers wont use those banks very often. But that I got a very good deal and had the pleasure of using and independant person. In regards to insurance Banks insurance is nearly always over priced or can be a cut down version of a product like trauma cover where many banks only cover 10 events where a specilised insurance company covers 44. However this is not always the case. A mortgage broker often acts as an insurance broker as well or can point you in the right direction.

    But the big thing is to do your home work and fit with what you like best. If your after a personal stress free relationship with a member of the community then I would go for a mortgage broker everytime.

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