Most every homebuyer needs a mortgage at some point during the home ownership process. There are two ways to take out a mortgage. You can either work directly with a bank or other lending institution, or you can contact a mortgage broker. There are differences between the two methods. Bank loan officers operate under different guidelines and with different goals than mortgage brokers do. A loan officer and a broker, though both mortgage professionals, play two very different roles.
Loan officers who work with banks and other lenders are like salespeople at a company. They spend much of their time working with clients and processing loans. They work solely for the bank or institution that employs them, and the loans that they offer all stem from this same institution.
As a result, loan officers are able to access a large number of different loan types very swiftly. They don’t need to search around or try to pin down an obscure rate. They already know exactly what they can provide you with, and they know the application and approval process step by step. Everything is more or less standardized. This makes loan officers very good at identifying what loan package best fits your needs.
Loan officers also work in a set locale. Because they operate from a bank branch or other office, they often deal primarily with borrowers from a consistent area or environment. They are familiar with local lending laws and housing procedures. They often have connections in the real estate industry who can further assist you with things like appraisals and inspections.
Mortgage brokers get paid on commission. Their entire goal is to pair you with the best lender they can find. As a result, mortgage brokers often have access to the best current mortgage rates and can get the best deals. A mortgage broker can connect you with a lender in an entirely different part of the nation, which gives you a great competitive advantage when searching for deals.
There’s a strong chance your mortgage broker can locate a better deal for you than what your local bank has to offer. Mortgage brokers are often well connected in the real estate industry, more so than bank employees, as most mortgage brokers have years of experience both local and broad. A mortgage broker will likely work with you until you’ve closed a loan deal that meets your needs, whereas a bank may turn you down if you aren’t a good fit for what they offer.
However, mortgage brokers are paid by lenders to set up deals that are advantageous to the lenders. This can create a conflict of interest. Still, the fact that mortgage brokers have access to a far wider array of loan types and can find loans that meet your personal needs makes them an excellent choice when you’re pursuing a home loan.
The choice is up to you. Loan officers and mortgage brokers fill different niches in the mortgage industry and can offer you different deals. Pursue what works best for you.
This guest post was provided by Kyle, a content specialist at Lender411.com. Lender411.com helps home buyers compare mortgage rates, find local lenders, and locate the best mortgage packages available.