Need A Mortgage? Know Your Lending Options

Image by Nattanan Kanchanaprat from Pixabay 

Taking out a mortgage is one of the most significant financial decisions that most people will ever make, and yet, despite the seriousness of this task, many don’t really know what to expect or what their options are. If you’re currently preparing to buy your first home, or even if you already have a mortgage and are seeking to modify your borrowing conditions, it’s important to know the lay of the land. In fact, understanding the mortgage market is key to protecting your financial future.

Not Just Banks

One of the most significant mistakes that borrowers make when applying for a mortgage is thinking that they can only get a mortgage from a bank. Though it is true that commercial banks play a central role in the mortgage industry, a little research quickly reveals all the places you can get a mortgage.

Of course, while commercial banks may not be the only option when it comes to getting a home loan, they do remain a good option. Banks issue mortgages every day, which means their lenders are skilled and aware of industry changes. However, many bank lenders aren’t actually registered, so it’s important to ask questions and be cautious.

Lenders Versus Brokers 

Another factor of the home mortgage industry that people often overlook is that you have the choice between working directly with a lender or working with a broker. Brokers are intermediaries in the lending – but they’re intermediaries who arrange about a quarter of all mortgages each year. Another fact worth noting about brokers: they don’t need to be licensed, and they’re typically lender agnostic. Their goal is just for you to receive a loan, which means they’ll shop your applications around to several lenders. Then, once you’ve received that loan, they collect a commission.

Non-Bank Pathways

If you choose not to go through a bank for your loan, then what other options are there? One of the most common choices today is to borrow through a non-bank lender. There are many of these, and they use various strategies to gain an edge over the banks. This includes banks like Firstmac, a leading Australian lender that relies on smart technology, and many of them function exclusively online. Though some people dislike working with non-bank lenders since it means they don’t get to sit down and establish a relationship, these lenders can be more flexible. That’s particularly helpful for those with some blemishes on their financial history, who may otherwise struggle to secure a loan.

Credit Union Considerations

Bank and non-bank loans sound as though they would cover the bases in terms of lending options, but don’t stop looking there. Another possibility, at least for those who are members, is to get a mortgage from your credit union. In some cases, you can also get a mortgage from a credit union based on certain professional or geographic connections, but the point is that you need to have what experts call a common bond in order to benefit from their services.

Most people will get their mortgages from one of just a few sources, but the more issues there are with your credit history, the further afield you may need to look to find a lender. Still, if you’re well prepared and have spent time-saving, researching, and improving your financial picture so that you can buy a home, you should be able to find plenty of opportunities to borrow.