Davies Home Loans won’t Charge you a Fee.
At Davies Home Loans, we think the best way to explain how this works is to use the analogy of a branch loan officer. If you were to take time off work to visit a branch for a loan, the branch loan officer will conduct the interviews, if they can help, they will offer a product from that bank and prepare and submit all the paperwork with you. For their efforts they get paid a salary. In the background, the bank is also paying for the loan officer’s uniform, desk, computer, staff room and other overheads such as building maintenance, electricity and insurance.
When you get a Davies Home Loans Broker to visit you, they will listen to your situation, compare this across many lenders and propose a solution. They will then prepare and submit all the paperwork for you. For this effort, the bank will pay Davies Home Loans to cover our costs such as salaries, vehicles, computers, staff room, building maintenance, electricity and insurance.
In both cases, banks have already factored all of this into their interest rates.
If brokers cost more than a branch loan officer, banks would simply hire more loan officers and we would be out of business. As they are not doing this, clearly we are the lower cost to the bank.
This is great news for you, as we believe that because we cost less than a branch loan officer, when we approach the banks head office for a discount on your interest rate, two things happen. First the bank is fearful we will change lenders and suggest you go to a more competitive lender, and secondly because we are cheaper, they have a little room to move anyway, hence a better rate than a branch.
Now we all know a branch loan officer can request a discount as well, but we believe when they approach head office for this, they face the consequence of a pay drop to cover this (usually in the form of risking the Christmas Bonus – yes most bank loan officers also get commissions and bonuses).
There is however a third option being DIY. Yes you can do a loan yourself, but …….
Lenders calculate the interest rate, terms and conditions based on their overheads, just like any other business. So if you were to do some aspect of the work yourself, hoping to save money, they still need to pay someone (head office loan officer) to check things and as a result they do not compensate people for their time. Nevertheless, the bank does save a bit in regards We would only recommend this path to sophisticated borrowers, as when you go the DIY path, if you get it wrong, there is no avenue for compensation.
Now that we have covered that, there are a few questions we often get asked;
Q1. Why would someone use Davies Home Loans for a loan against a well know big bank brand.
A1. The answer is simply, that the loan is the same. People can get the big bank brand loan from us. The bigger question is why would someone got to a branch loan officer, who is obligated under law to look after their employers interests versus a broker who under law must look after the borrower.
Q2. Doesn’t using a broker costs more than going direct.
A2. Whether you use a broker or the loan officer in a branch, both are paid by the lender.
Q3. Surely you can get a better deal going direct to a lender.
A3. Whatever deal you can get, Davies Home Loans can also get (or better). We deal in hundreds of loans and have access to lots of lenders (including broker only lenders). Davies Home Loans has a stronger negotiating position.
Q4. I have been with my current bank for years and I’m sure they will look after me.
A4. They will do the minimum to keep you happy. Unfortunately Banks are owned by shareholders, they look after the shareholder first. We suggest chat with us first, get educated and hit your bank with full knowledge of what is out there and available. Unfortunately all too often they will only offer a token gesture.