Choosing between a bank manager and a mortgage broker is not easy when it comes to taking home loans.
There are some that prefer banks, while there are others that settle for mortgage brokers. Both have their share of advantages and drawbacks, and it is up to you to choose between these two for taking a home loan.
There are certain parameters that help you in deciding between a banker and broker. You need to qualify either of them based on these parameters.
Choice of products – If mortgage is the product you are looking for then the options with a broker are wider as compared to a banker. A bank manager could only offer a product that is designed by the concerned bank and nothing beyond.
However, a broker has a much wider choice as it could arrange mortgage from several sources. A broker has access to several mortgage plans and is consequently in a better position to offer a wider choice. Mortgage plans offered by a broker are of different banks and financial institutions.
In contrast a bank can only offer its own plans and not anything external. The choice being more with a mortgage broker you stand to get a better deal rather than a bank.
Focus of activity – A commercial bank conducts several activities and mortgage is one of them. Modern day banks have separate departments like retail banking, corporate banking, card banking, loans and advances, and on-line banking. Mortgage is one of the several activities carried out by a bank. Though each of these departments has separate functional areas and separate targets, they work as a single unit focussing more on the segments that give more earnings.
Mortgage brokers are only concerned with home or property mortgages and are able to offer more dedicated service and product options. As mortgage is their only customer product, they stay focussed on it and try to increase the options for a greater range for willing customers. Their focus of activity also makes them sincere in their approach to their profession. A mortgage advisor Bury St. Edmunds would always provide you with the best loan options.
Experience – Experience is a major criterion of choosing between a banker and a broker. Specialization plays a pivotal role in gaining experience. A commercial bank has multi-faceted activities, and has difficulty in specializing in any one area. A bank is not only a money lending organization but offers depository, card banking and stock market services. It is a comprehensive body catering to retail and corporate money market functions.
Provision of mortgage being the only activity of an advisor, specialization is of a much higher degree as compared to a bank manager. Further with several years in the same activity, specialization and experience are both more in case of a broker.
Credibility – This is an important criterion for any market lender. A bank has a much higher credibility than a broker as net assets are considerably higher in case of the former. An organization with a greater net worth has higher credit rating. Between a mortgage broker and a bank the latter always enjoys greater reliability.
As mortgage is a long term affair, complete transparency is necessary in its dealings. As reliability of a bank is more than that of a mortgage advisor it is expected that deals are conducted as per standard instructions. Deviations if any are recorded properly so that there is no scope for confusions.
Follow-ups – A mortgage broker is more careful about your loans and often follows-up on your behalf, thereby saving your time and effort. For them every individual customer is important as they do not have any other business as a back-up.
About the author – Gregory Hines is an investment advisor offering services to institutions as well as individuals. He is also among the leading mortgage advisers Bury St. Edmunds. and loves writing on investment subjects both online and offline.
