There was a time when people would automatically turn to banks for home loans. These days, non-bank lenders are rising in popularity, with many new credit unions, building societies and independent mortgage lenders cropping up. This has led to a confusing number of choices to consider when searching for a mortgage that best suit your needs. Here are some facts that might help.
Home Loans from Non-Bank lenders?
Non-bank lenders have much lower overhead costs, allowing them to offer lower interest rates and fees on their home loans. They are also more likely to offer a wider array of mortgage features, such as better advance options and flexible pay instalments. Many of them are more lenient when it comes to approving mortgages for clients with lower credit ratings, and for people who are self-employed or work on a commission base. You’ll also have the added benefit of a more personal style of service, which can be rare among the big banks.
Home Loans from a Bank?
Many people feel comfortable going with the traditional option – banks represent familiarity. They also offer a wider range of overall financial products and services than non-lenders. Bank home loans allow you to use one source for all your financial needs, which is more convenient for some people. You may also find that banks offer lower entry fees for mortgages than non-bank lenders, though this is not always the case.
The Bottom Line
As with any big decision in life, it’s important to do your homework. While non-bank lenders are fast becoming the new alternative with lower interest rates and personable service, you may find yourself limited by the overall products and services that are offered. However, this is entirely dependent on your situation – for example, you may discover that you won’t be able to take advantage of some of the benefits of the home loans that they offer. So do your research and then determine what works best for you.