A mortgage broker can shop the banks for you; saving you time and money. A broker has many banks to choose from so you get the best rate!
Mortgage brokers work with wholesale rates rather than retail rates. They can often provide rates lower than what you may get quoted by a bank which uses retail rates.
Mortgage brokers originated over 70% of all mortgage loans originated over the past couple of years. For this reason alone, this should let you know how key the role of a good mortgage broker is.
A mortgage broker has the ability to have your loan approved and submitted at many different lenders. If a particular lender should cause a delay or refuse the loan the mortgage broker can have another lender begin to underwrite the loan. This will insure there are no timely or costly delays in your loan process!
A mortgage broker makes banks compete with one another for your business.
Mortgage brokers allow you to see multiple offers at once. You are given choices on which program best fits your needs. Direct lenders often have higher costs and are forced to charge you a minimum in points and fees. Brokers give you the flexibility to negotiate those fees.
A mortgage broker generally have established business relationships with multiple banks, and therefore has many more loan programs available, whereas a bank loan officer can only sell mortgage products offered by the bank. While a mortgage broker has the ability to shop different lending institutions to find loan programs tailored made for homebuyers in almost any financial situation, a bank based loan officer can only offer the bank's product, even if that loan product may not be the best for the home buyer. For example, a neighborhood bank may have a "Stated Income" program for loan applicants with credit scores of 700 and above and a "No-Doc" program for credit scores of below 700 at a higher interest rate. Since a borrower with a credit score of 685 does not qualify for the "Stated-Income" program, the bank loan officer would put him in a "No-Doc" loan with a higher interest rate. On the other hand, an experienced mortgage broker can often find another lender offering a lower interest rate "Stated Income" program for the same borrower.
A mortgage broker can quickly determine the best loan program for you, then search through several lenders who specialize in that program to find the best rate and terms for you.
A bank, on the other hand, has fewer programs to choose from and must sometimes try to fit your unique situation into one of their programs, whether it is a perfect fit or not.
In addition a good mortgage broker will look at more than just obtaining a loan for you. They will look at your whole financial picture to make sure the loan program fits your short term and long term goals.
Home
