Is A Mortgage Broker Right For You?


Which Is Better: Mortgage Broker Vs. Bank

If you’re buying a home, it’s nice to have someone with experience to guide you through the somewhat chaotic and confusing mortgage process. Mortgage brokers are more than just people who accept your application and shop it around to lenders - they also take your needs into consideration and act as advisors, guiding you every step of the way. But is a mortgage broker right for you? SEE ALSO: Choosing An Insurance Agent: How To Find Your Best Option

Benefits Of Mortgage Brokers

Mortgage brokers function as intermediaries between you and lenders. They can help you:
  • Locate the best loan product to fit your financial situation
  • Access lenders who are willing to work with you if you do not fit the “typical” loan candidate profile
  • Find the best interest rate
  • Save time shopping for a loan
Mortgage brokers have gotten a bad rap over the years, when a few bad eggs peddled unsuitable mortgages and contributed, in part, to the mortgage crisis of 2008. In recent years, however, the industry has changed, and new government regulations have paved the way for more integrity among brokers, while shutting the door on predatory practices.

Disadvantages Of Mortgage Brokers

These professionals connect you with the best lenders regardless of their location. However, this can create a problem when local issues arise during the application process. Out-of-area lenders may not be familiar with the specifics of properties in your region, or the best local support professionals for your closing. These impediments can slow down or delay the application process. Brokers will assess a fee for their services. This fee, a percentage of the loan amount, is either paid by the borrower upfront, or by the lender on the back end.

Alternatives: Ye Olde Bank

If you don’t want to work with a mortgage broker, you can apply for a mortgage directly through your bank. Advantages include:
  • Your local bank will understand the laws of the land and the general rules of your local area
  • Banks are highly regulated
  • They may offer you savings if you already have an account with them
Working with a bank will not necessarily be risky, but it does have its share of disadvantages:
  • No comparison shopping: Bankers offer only their own products, so your choices will be limited.
  • High credit expectations: Banks have strict policies when it comes to approval, and if you don’t meet their expectations, you’re out of luck.
If you shop around, however, you may be able to locate a lender that will work with your unique financial situation. The ultimate decision will depend on your financial situation and your comfort level. If you’re leaning toward a mortgage broker, seek recommendations from friends or real estate agents before starting your search. SEE ALSO: Yes, You Can Change Mortgage Lenders Before Closing

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