Borrowing from a Mortgage Broker or Bank- Which is the Wiser Choice?

While borrowing a loan, you have a variety of options to choose from. You may choose to borrow from banks, large mortgage companies or even mortgage brokers.

Mortgage brokers act as middlemen between the homeowner and the mortgage lender, whereas a broker prepares your loan application, financial documents, and issues mortgage pre-approvals just like other lenders. Mortgage brokers work with several mortgage lenders and banks and submit your loan file to them to issue the loan. Brokers charge commission from lenders for completing the mortgage application and documents.

A Bank or a mortgage lender is an organization that actually funds the loan. The homebuyers start working with the loan officer who is an employee of the Bank. The loan officer has access to the home loan programs that the lender offers. Working directly with the lending company instead of a Broker can save you some cash on fees. There are a number of factors that you must consider while choosing to borrow loan from a mortgage broker or a Bank/Lender.

• Mortgage brokers have access to a wide pool of lenders and programs. On the other hand, when working with a Bank, the loan officer will have access to only the bank’s mortgage programs, and mortgage rates. To ensure that you are offered the best interest rates for your loan, you must speak to at least one or more brokers to compare the loan offers using Mortgage Calculator from Your Finance Adviser.
• Mortgage Brokers shop interest rates for you and help you compare different terms such as fixed-rate mortgage v/s adjustable rate mortgages, no deposit home loans, etc. and advise you on various other terms to tailor a loan that fits all your borrowing needs.
• With an imperfect credit, mortgage brokers take the lead in the borrowing process by proposing more programs to you than what you may actually qualify for. Tools like Mortgage Calculator will help you understand and estimate the expense that you would be incurring.
• Mortgage Brokers bring along a lot of experience with them, which provides you with sufficient knowledge and information, to begin with, the process of loan borrowing. You may also have access to more loan programs, especially if you have had a low credit score or income issues. You may also ask your mortgage broker to look for no deposit home loans.
• Following up for your loan approval, along with the long procedure of loan borrowing can be a frustrating task. Mortgage brokers have a set process of following up and chasing them if required whilst keeping you informed and saving your time.
• Brokers often own their businesses and are committed to their clients in the long term, with expert industry experience. Banks, on the other hand, move their staff around which leaves their customers struggling between various bank officials.

Based on the type of loan that you are seeking, you may save yourself thousands of dollars by shopping for various lenders for your mortgage loan. Therefore it is imperative that you take the decision carefully only after complete research and study. Check the credentials of the mortgage brokers, ensure that they have an experienced background and that they are dedicated to their work, which is helping you buy the house of your dreams.