When it comes to getting a mortgage done, you have two options. You can go to a bank yourself and get on it, or you can hire a mortgage broker. Which option is right for you? In the article below, we compare a mortgage broker vs. a bank so that you will know the difference.
We will start off with the bank first, telling you what happens when you go directly to a bank to find a mortgage.
When you go to the bank, you meet with a loan officer. You will provide your financial information, and they will pull your credit report. Based on your income, current assets, and credit history, the loan officer will give you your options if the bank is able (and willing) to work with you.
From there, it is up to you to negotiate a better rate if you don’t like the one offered. If your negotiation skills and iron will is not great, going directly through the bank may not be in your best interests.
If you do not like that particular bank, you can always go to another one, and the process begins again. The only problem with that is that you get your credit report pulled each and every time you walk into a different bank. Each time you get a credit report pulled, it adversely affects your credit.
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Here are some pros and cons of dealing directly with a bank.
– You are guaranteed to have an established lender throughout
– You could get some extras or discounts for getting a mortgage through your bank
– Appraisal fees and closing costs could be reduced or paid for totally by the bank
– You get face time with the loan officer most of the time (within banking hours, of course)
– It is doubtful that you will get the best possible rate, regardless of your negotiation prowess
– Finding a lender to work with you is more difficult if your credit is not great
– Shopping around is all on you
These are some of the most common pros and cons you could experience by dealing directly with the bank. Now, we will take a look at the mortgage brokers.
When you use an agent, the communication between you and the bank goes through the mortgage broker. The paperwork and processing are handled in part by the agent, ensuring all goes smoothly and quickly.
Like banks, mortgage brokers have their pros and cons.
– Only pulls one credit report, used for shopping around
– Has access to better rates than the public
– They are well-versed in the art of negotiation
– Shops around various lender types (banks, credit unions, private lenders, etc.)
– They are certified specialists in all things mortgage
– May secure a deal from an unrecognized lender
– May not work for your best interests, but for bigger commission
– May not shop around at all lenders if they have side deals with an individual bank
– May not be fully available to you in person when you need them
Now that you know the difference between going through a mortgage broker vs. going through a bank, you can decide for yourself which one is the best option.
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