Mortgage Banker vs Mortgage Broker

Are you feeling confused or overwhelmed by all of the different mortgage loans that are available through a variety of different banks, credit unions and other lending institutions? Or, are you interested in purchasing a home, but you simply do not have the time to compare offers from dozens of lenders? Perhaps you are interested in making a risky real estate purchase, or you have a less-than-ideal credit rating. If any of these scenarios sounds familiar, whether dealing with Colorado luxury condos or a home in Austin or just about anything else, then you may be interested in obtaining a mortgage loan through a mortgage broker.

Although it is possible to obtain a mortgage loan without going through a broker, many future homeowners find that hiring a broker to help them find a loan is a good route to take. Even for those with good credit who are taking out a traditional mortgage loan, hiring a mortgage broker can help save money in the long run. This is because many lenders only offer their wholesale prices to mortgage brokers. Therefore, while you will still have to pay the mortgage broker for his services, the long-term savings many far outweigh the cost of hiring a professional.

Of course, hiring a mortgage broker isn’t necessarily for everyone. Since there are no guarantees that a mortgage broker will be able to find you a deal that is better than what you can find on your own, you may not feel the cost is worth the risk. Or, if you have already established a relationship with a local bank, you may simply prefer to take out a loan through that bank. Not only can this be a more convenient option for some buyers, but you may also be able to get additional perks due to the relationship you have with the bank. Furthermore, the approval process may go more smoothly since the bank already has some of the information that is necessary to complete the approval process.

For buyers with less-than-ideal credit, going through a mortgage broker may be the only way to obtain a loan with reasonable terms. Since bank loan officers are not paid on commission, they have no incentive for approving loans for those with a poor credit rating or even for those who are taking on a risky real estate purchase. Mortgage brokers, on the other hand, earn their living by finding loans for their clients. Therefore, you have a much better chance of finding a loan with reasonable terms when you hire a mortgage broker rather than trying to obtain a loan directly through a bank loan officer.

Whether you should go obtain a mortgage loan directly through a lender or go through a mortgage broker is a personal decision that needs to be based on your unique situation. Regardless of your decision, it is in your best interest to explore all of your options first. This way, you can be sure you are making the decision that is right for you.

About The Author – Brian Kinkade, Realtor, specializes in Colorado luxury condos, such as Walnut Condominiums Boulder, as broker of The Home Cart Team based in Denver.

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