Buying a home or property isn’t an easy task. Especially when you are in a fancy and flamboyant neighborhood in Singapore, the process gets extra tricky. You have to throw yourself into loads of research and brainstorming. Needless to say, there is no room for you to compromise with the choice of land or the grandeur of your dream house. But, there’s always a thing that keeps stinging your back, the budget.
However, it doesn’t take much to keep it less expensive in this age of a growing economy. All you need is the right financial planning. Hence, comes the need for a mortgage broker. But do you really need one? Let’s find out here.
What Is a Mortgage Broker?
Let’s break the shell to you. Buying land or property through a mortgage broker is the cheapest idea right now. You may wonder who and what is a mortgage broker. A mortgage broker is a property agent who orchestrates the whole ground for your home loan. Mortgage brokers Singapore associate with financial institutions and banks that provide a cheaper home loan to buyers. A mortgage broker covers it all by collecting the clients for the respective banks to perform all the loan-related paper-works.
Banks that provide home loan packages have their own set of mortgage brokers working for them. Indeed, different banks offer different terms and conditions, and the rate of interest also varies. Singapore has more than 200 registered financial houses that help find a home loan package to customers. Therefore, you have to pick yours according to the criteria that fit your investment plan.
What’s the Difference Between a Mortgage Broker and a Mortgage Banker?
When in the game, you must know the bits and pieces of the mortgage loan process. There is a fine line between what we call a mortgage banker and a mortgage broker. A mortgage banker is a financial assistant involved in the process of loan sanctioning. He belongs to the bank itself. Mortgage bankers help you with the process when you hand him your loan-related documents. A mortgage banker strictly confines himself to his own financial institution.
While mortgage brokers can give you a discreet idea of several banks offering mortgage loans, he provides you a comparative analysis of which bank offers you better deals on home loans.
Therefore, they help you to find cheaper mortgage loans. Practically speaking, mortgage brokers belong to the same group of banking associates who once worked for individual financial houses. Therefore, they’ll tell you the nuances and the flip sides of getting into a mortgage loan.
How Can a Mortgage Broker Benefits You
There are several ways that a mortgage broker can benefit you in getting a home loan for property purchase. You are already in charge of the investments and of choosing the right property for you. And taking care of the loans and all the particulars that come with it is the last thing that you would want to deal with. In such a situation, an experienced broker mortgage is all you need in your life. However, you must hire an efficient one; otherwise, you might mess up. We list a few benefits that you can earn by getting the right middleman of the board.
Aim for Non-Residential Properties
With good brokers, you can aim at getting loans for non-residential lands too. Hence, if you plan for an office project, you crack the deal without a hiccup.
They Provide Several Investment Deals
You get to know of investment deals that you might not come across had you ventured alone. They are into the business and understand what it takes to dive into mortgage loans.
No Other Financial Charges
A good mediator can even reduce the unnecessary financial charges that the bank can hurl at you. This includes charges like appraisal charges or application charges that you wouldn’t avoid otherwise.
Reduces the Time Consumption and Work Load
Hadn’t you hired a broker, the whole process would have left you on your toes all the time? He might help you find cheaper deals with affordable interest rates since he is an insider and knows better about the circle.
Get Loans at Low Credit Scores
If you don’t have a considerably high CIBIL score, there is a chance that the moneylender bank will reject your loan application. A good negotiator can get you the deal even with a not-so-high credit score.
Speeds up the Process
The loan getting process accelerates if you hire a mortgage broker and let him handle the procedure. He’ll guide you on the documents you’ll need to show and arrange them in no time.
The Potential Risks of Working With a Mortgage Broker
However, you must know and consider the other side of the story. Certainly, it’s wise to rely on a mortgage broker for your property purchase plan. But, there are potential cons to the whole process as well. During the famous real estate market collapse back in 2008, studies had revealed that brokers exploited the property buyers by misleading them into mortgage loans with higher interest rates. Hence, we list some risks here so that you can calculate before investing in a mediator.
Broker’s Profit Is Important
Never expect brokers to work for you without considering his profit. The mortgage brokers get a fair amount for bringing the client to the bank. Hence, he would insist on you taking the loan that tends to have a high-interest rate so that his commission increases.
They May Not Find the Right Deals
A mortgage broker finding you the best deals is often a too-good-to-be-true scenario. There are several banks that help you get similar mortgage terms and interest rates that the brokers might find for you.
They Charge a Lot
Don’t let them fool you by saying mortgage brokers work for free. They don’t work for free. Sometimes they charge quite an amount for their bit of work. In fact, studies revealed that they squeeze money from both ends, i.e., the bank and the property buyers.
They Can Mislead Through the Application Process
Mortgage brokers often misguide you through the application process. They trick you with the terms that the bank offers and project to you that these are the absolute terms and conditions for your loan. Whereas, the chances are that your bank sets the terms based on the actual application you have made.
Banks Often Don’t Cater Mortgage Brokers
Post the industrial breakdown in 2008, several banks don’t work with mortgage brokers. For their fraudulence, the banks often put at the unpleasant situations of faulty transactions. There are banks that will help you get even better deals without mortgage brokers.
Should You Consult With a Mortgage Broker or Direct Lender?
Now, after coming in terms with several pros and cons, you might get skeptical about consulting with a mortgage broker. So, should you reconsider your plan to get a mortgage broker on board while buying a property? Should you instead rely on a direct lender? We suggest otherwise. You don’t have to choose between the two. There are a few possible ways to deal with the complicated route of getting the right mortgage deal.
You absolutely don’t need mortgage brokers if you are working in the business sector or in banking. Try finding a financial adviser who you have seen in the close quarters.
In Singapore, there are several banks and financial houses that you can approach for direct lending purposes.
You can visit a mortgage consultant while looking for direct lenders through the internet. Take your time to compare the terms and home loan rates they help find and take your stand accordingly.
In conclusion, property buying is a long term investment plan, and a lot of time, and research goes into the process. However, if you are a Singaporean and venturing into purchasing a new property, here’s the good news for you from 365 Credit Solutions.
365 Credit Solutions is one of the leading licensed moneylenders based in Singapore. It charts in the top 10 premier financial houses in Singapore right now. You can go for a fast cash loan application with guaranteed low-interest rates and flexible repayment terms. Not sure how much you can borrow? Check out how much can you borrow from a private money lender Singapore.
Apart from personal and business loans, 365 Credit Solutions provide the provision where you can take out a loan to help them pay the credit card debt.