When looking for the best mortgage for your needs, you may have to decide whether to borrow from a bank or a mortgage broker.
A mortgage broker is an intermediary who makes it easier for people and businesses to get mortgages. In essence, they are like supermarkets for home loans. Many borrowers find it easy to get help from them because they have access to a lot of lenders and offer a lot of different programs. Mortgage brokers can still help you get the money you need, even if you have bad credit or are in a unique situation. There is a fee that mortgage brokers charge, which you should ask about and figure into your initial payments.
Most of the time, mortgage brokers will start, process, and send the loan to a lender, who will then sell it to an investor. They work on commission and will charge you more to close the deal. Brokers can charge the borrower as much as they want for processing the documents needed for the loan, so be careful not to be gouged.
More than 80% of all mortgages in the U.S. are given out by mortgage brokers. There are about 20,000 mortgage brokerages. The reason they are so popular is that they make it easy for people to borrow money and give them resources.
"Mortgage banker" can mean either a person who works as a loan officer at a bank or the bank itself. They are experts at making mortgages, selling them to investors, and taking care of them afterward. Fees are needed for both getting a loan and keeping it up to date, which are the two main ways that mortgage banks make money.
One of the biggest differences between mortgage banks and mortgage brokers is that banks tend to set their fees in a more standard way. Bankers are told what fees to charge and are told not to change them. This gives the borrower more stability and keeps them from being surprised when they find out how much the home loan fees will be.
Now, the question is which choice is better. The answer is simple: whoever gets you the best deal. Some borrowers find it comforting and helpful to have a mortgage banker follow them through the life of their loan, but not all do. Other borrowers don't care either way. With this knowledge and a thorough comparison of the deals you can get from mortgage brokers and bankers, you should be able to figure out which path to take.
