Purchasing your first home is easily one of the most transformative financial decisions in your life. However, it is also one of the most precarious choices you can make due to the extreme impact it can make on your financial future – be it good or bad. Apart from having a super steep cost of living, Singapore also happens to be one of the most expensive real estate markets in Asia. This is why it is critical for Singaporeans to exercise their financial savvy to the maximum and ensure they don’t get suckered in for a bad property deal, especially when it comes to getting the ideal mortgage.
While there are a bevy of real estate finance experts that you can pick from to sort out your new home’s mortgage deal, it ultimately comes down to choosing between a direct lender or a mortgage broker. Although mortgage brokers and direct lenders operate on the common earning principle of “more sales = more commission money”, there are a few staunch differences in business principles between them that will prove that mortgage brokers make better financial allies when it comes to this monumental decision.
Let us highlight 5 key benefits you can gain by hiring a mortgage broker instead of a direct lender:
Lack of Vested Interests as Motivation
While bank loan officers and property agents are free to misdirect buyers that are ignorant since it does not affect their business archetype, mortgage brokers cannot afford to do so because information is their sole service. Selling poor information to customers is akin to putting the axe on their own foot for them.
Loan referrals are only a secondary facet of their profit-making, but passing off a poor primary product can build up so much notoriety around their brand that they may never see a customer come their way again.
Constant Bird’s Eye View of the Market
Bankers are hell-bent on convincing you that their rates are unparalleled in the market. Property agents may not have much expertise on the matter either and may only be aware of a couple of viable deals. However, mortgage brokers always have the entire view of the real estate market under their scanner and have a gigantic selection of product information accumulated from hundreds of companies at their disposal to give you the most competitive rates.
They can also help you time your property purchase after a detailed analysis of the real estate market so that you aren’t making an overinflated investment before the bubble bursts.
Massive Range of Options
In this financially conservative economy, direct lenders have become wary of specific loan products and have limited their selection of products to exclusively cater to buyers with a strong credit history and abundant financial assets to comfortably pay back the mortgage amount.
On the other hand, mortgage brokers take a proactive interest in hunting down the ideal lending agency that can best serve the interests of a buyer with a moderate to low credit score. Mortgage brokers also develop good long-term working relationships with numerous lending agencies, which means that they can cut a better deal out for buyers in terms of interest rates and additional fees.
Helping You Fish Out Malicious Lock-In Clauses
When it comes to purchasing property, lock-in clauses are some of the most potentially dangerous and confusing terms to spot, especially for first-time buyers. Essentially, the role of a lock-in clause is to issue a penalty amount for refinancing a home loan. The lock-in penalty rates vary from bank to bank and the lock-in time period.
These penalty payments play no part whatsoever in paying off your home loan and are just an insufferable liability for the buyer. While bankers may try to dupe you and lawyers may overcharge you for fishing out such clauses from the contract for your attention, a mortgage broker will simply share all this information for free.
Going the Extra Mile
The ultimate endgame of your interaction with direct lenders or mortgage brokers should be a ton of savings. This is where mortgage brokers can outshine their competitors by not just sorting out the cheapest home loan for you, but also optimizing the loan application process and helping you make a lot of potential savings as well.
Apart from effectively bargaining with bankers and saving you from lock-in clauses, brokers also ensure that your financial data is perfectly organized to fast-track your loan application so that it gets cleared as soon as possible.
For more financial tips and tricks to optimize your financial lifestyle, visit imoney.sg and learn all the best moves to make with your money.
This article was first published on http://business.asiaone.com/
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