Home Loan – Compare Interest Rates Yourself or Engage A Mortgage Advisor?

With the prevalence of online portals dedicated to facilitating mortgage comparisons, it is now common to hear a friend compare and apply for home loans on their own instead of engaging a mortgage advisor. The availability of  data on interest rates and loan tenure makes it alluring to handle the process of applying for a home loan yourself.

However, it can be time-consuming to understand the pros and cons of the various types of home loans in order to determine the most suitable mortgage for yourself. Without proper planning of your property portfolio and self-awareness of your income and risk profile, you could walk into a mortgage trap without realising.

Here are a few reasons why you should engage a mortgage advisor for your mortgage.

1. Knowledge of Regulations and Transactional Processes

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There are more than 100 loan packages offered by banks in Singapore. Each package has its unique proposition and features that makes it attractive. For a person who is not in the mortgage industry, he will not have the adequate  knowledge of the different bank policies underpinning the various mortgage packages to make a well-informed decision.

On the other hand, mortgage brokers are well-versed with the terms and conditions of each type of mortgage. They are also trained to optimize the right manner of holding and loan structure that best suits the client, and profile the clients accurately to determine whether fixed or floating rates are more suitable for them. Besides advising on portfolio planning, mortgage advisors are also kept up to date on the current interest rate environment, as well as regulatory requirements of stamp duties and tax payables.

That being said, it is possible for anyone to research and understand the various mortgage packages through their own research, but it will be tedious and time-consuming. Most importantly, mistakes may cost you a hefty sum to resolve.

2. Access To Latest and Most Competitive Bank Loan Packages

Information on each bank loan package can be easily sourced from the internet. A simple google search can get you the information on the interest rates and mortgage package features all summarised in a user-friendly format. However, in this current interest rate climate where rates are rising quickly, rates that are being offered today may not be available when you are ready to apply.

A professional mortgage advisor has  access to the latest bank loan packages – both published and unpublished rates. Established mortgage advisory firms are also in a better position to negotiate for better rates because of economies of scale – they generate high  transactional volumes to banks each month.

Often missed but equally important, mortgage brokers are well supported by a network of experienced and well-trusted bankers who will ensure that the applications they receive get through to the bank’s credit committee and approved in the most efficient manner.

3. Screening and Coordination

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A huge advantage of engaging a mortgage advisor is that coordination between clients and banks can be made more streamlined. Most often, after receiving the application forms, the banks will come back with queries regarding your credit profile. The mortgage advisor will have the experience to field some of these questions for you, and help you handle these queries without troubling you too much. Mortgage advisors will also help to put your application together, just so that the banks have the sufficient information to approve your loan in the shortest time possible.

In the same frame, mortgage advisors can help with screening of the parties involved in the transaction. There is a need to ensure that the bank you are keen on taking the loan from, complies with industry practices and is trusted in the industry. It also includes ensuring the type of property you are taking a loan out for, falls within the requirements of the bank. Such processes can add even more paperwork and applications to an already complex process.

In Conclusion

No two mortgages are the same and no two mortgagees have the same needs and limitations.

Sometimes, you might think it is worthwhile to skip on the middleman because of your good credit score or the low level of complexity of your transaction but it may not always be the case and mistakes can be costly. If you still wish to apply directly to the bank for your mortgage, our advice is to read the fine prints of contracts to avoid unnecessary penalties in the future. Apart from interest rates, clients should consider other features of the mortgage such as tenor, waiver of penalty, free conversion, etc.

Still unsure about how to pick a suitable mortgage advisor or property loan? Here are some of our articles that can help you out!

What Is The Best Home Loan In Singapore In 2022?

How Much Should I Borrow For My Property?

Bank Loan Or HDB Loan – Which Is Better For You?

Alina Tan
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