One of the first things you think about when deciding to Buy a home is applying for a mortgage loan. Many people wonder if it’s better to work with a mortgage broker or a bank.  The differences are bigger than you think.

Banks, Credit Unions, and Similar Lending Institutions

Lending officers at a bank or credit union Sell and process mortgages originated by the institution they work for. Any of the types of loans banks have will originate from one lending institution.

Banks are generally more conservative in their lending process. If you don’t fit the profile in credit, job, and income, you will likely get declined or you won’t get the rate you could possibly get somewhere else.

Sometimes you can get a better deal with a bank, but they usually only offer a few loan programs, so you’ll either be approved, declined, or counter-offered. Their loan process is also very lengthy and bureaucratic.

While a bank may be more familiar with your particular financial situation than a mortgage broker, you are ultimately limited to the types of loans you can get.

Mortgage Brokers and Loan Officers

Mortgage brokers and loan officers usually work with a variety of lenders. They evaluate each person’s credit situation, job, and income to determine which loan will best fit that person’s needs. Mortgage brokers can often find a lender who will provide loans that a bank refuses. If your credit is less than perfect, a mortgage broker can still likely find a loan for you; whereas, you probably won’t get the same loan from a bank with less than ideal credit.

Unlike banks, mortgage brokers are professionals that deal with mortgage loans day in and day out. Buying a home can be stressful and complicated at times, and a mortgage broker’s professional experience is often worth paying for.

If you are self-employed or if you recently switched professions, mortgage brokers may be a better option for you as well.

Pricing with mortgage brokers can be just as competitive as a bank. Wholesale rates are generally much cheaper than retail interest rates you’ll get with banks.

When applying for a mortgage loan, you’ll want to shop around to find the best option for you. If you are seriously looking to Buy a home, contact me today to discuss your options.