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Owning a house is a dream for many. However, it is not possible to achieve it for all. But what if someone tells you that you can do so? Even if you do not have enough money, you can always get a loan from a bank or through a mortgage. Therefore, if you are short of money and you believe you can easily return it in a specific time, you can always contact such loan providers.
Going to a bank is one choice. But there are brokers who will also offer such services. Their policies and rules are a bit different from others. Moreover, not every broker will offer a house loan to you. Some have very strict policies while others have limited funding. Therefore, everyone will offer a limited amount. So if you want to get a house loan, you should look for a broker who can provide that.
For example you can get a house loan from a Bristol mortgage broker, visit this site to know more. You can book your free consultation too. So if you are looking for more information about the Bristol market, you can contact their experts. They will help you with anything you want.
But if you are not sure whether you should contact a bank or a broker, here are a few pros and cons of getting a house loan from a bank.
Pros of getting a loan from a bank
1 – Safety, security and trust
One of the biggest benefits that banks have is the trust of people in them. There is not a single office of a bank. If a bank wishes to operate in a country, it will need permission from the government. And to do so, they will need to abide by the rules set by the government. Therefore, they won’t do anything illegal otherwise, they will pay the fine.
In addition to this, a lot of banks have been operating for some time. Therefore, people are well aware of them. The trust of the local community in their name brings them business. That is why they do their best to provide better services.
So if you get a loan from a bank, you can trust them with everything. They won’t write illegal terms. Likewise, their rules will be easy for you to accept. The interest rate will be set in the beginning and you will pay off your debt with that limit. They cannot increase the interest rate during your payoff time. While this is not the case with some private brokers.
2 – Low risk of fraud
One of the biggest scams that people can suffer from is fraud. If you get a loan from a broker and he is a fraudster, he won’t provide you with any receipt. Thus, you will not have any proof of your payment. It is highly likely that you pay off all of your debt but they refuse to accept that. As a result of this, they will continuously pester you and ask for more money.
However, if you pay off your debt installment, you will get a receipt from the banks. These receipts will help you to stay out of trouble. Moreover, you will have proof in your hand that you have paid this much amount and what is remaining behind.
In addition to this, they might increase the interest rate during your payoff time. Thus, you won’t be able to get rid of them even after paying a lot more than what you got previously.
3 – Higher limits for loans
Another benefit of having a contract with a bank is that they have higher loan limits. Not all brokers can help you get a house. In the financial market, there are only a limited number of brokers who will easily offer loans for homes.
Others won’t have enough funds. Or they will set very strict rules for that or will ask for a very high-interest rate.
On the other hand, if you are dealing with a bank, their limits are higher. They can offer a high amount to you without any problem. Furthermore, the rules and clear.
Cons of dealing with a bank
1 – They won’t easily give a loan
If your credit history is not good, you will have a very difficult time with a bank. Banks are not like mortgage brokers. They do not have gangsters to get their money back. Furthermore, they work in a legal way. Therefore, they will only give the money to people who have a good credit history.
In addition to this, they will also look for your past records. If you have a criminal record, there will be more trouble for you. Although brokers will also go through all these factors, but some of them will still provide you with a loan. Such brokers will increase the interest rate.
Therefore, if you plan to get a house of your own in the future, stay out of trouble.
2 – High-interest rates
Although the interest rate is set for banks, it is still too high for many people. Banks do this to get back their invested amount with profits. Therefore, they won’t admit that this amount is too high.
On the other hand, brokers do not have such high-interest rates. Some will even give you an amount at even 5% interest. These limits vary from broker to broker and also on the credit history of the person.
3 – A long-term commitment
If you are buying a house, you will need a high amount. Therefore, you will be bound for many years. You will have debt on you for future years. Thus, if you lose your job or are having a difficult financial situation, this loan will make things tough for you.
Banks will sign a long-term commitment and during these years you won’t be able to get any other loan. Thus, you will need to work hard to pay off the amount.