A mortgage broker can offer a wider range of options and speed up the mortgage process, but working directly with a bank gives you more control and costs less. Whether you should work with a direct mortgage lender or a broker depends on your individual finances. But overall, if you have a strong credit score without any late or late payments on your credit reports, you can expect to pay lower fees when you work directly with a mortgage lender. However, if your credit isn't perfect, and you might need a mortgage with bad credit, a broker might find a loan with a lower mortgage rate.
And if you're struggling to qualify with a mortgage banker or a non-bank lender, a broker, who works with multiple lenders, could find an originator who approves you. The main advantage of a mortgage broker is getting help navigating the complex landscape of banks and lending institutions. A broker is likely to have more knowledge of the mortgage landscape than someone who is simply looking for a mortgage. The best route for you could decide if you already know a good mortgage broker or bank loan officer.
If you have a line about a great broker or banker who is knowledgeable and trustworthy, or if you have had a good experience working with your bank on a loan in the past, that could tip the balance. If a mortgage broker finds a loan that you want to proceed with, they will be the middleman between you and the lender. They will take your completed application, compile your supporting documents, and transmit any requests for additional information from the lender's underwriting department. Some lender sites, such as Rocket Mortgage, also have a search engine that will connect you to local mortgage brokers.
Loan officers and mortgage brokers can be really helpful to you along the way, but you'll need to rely on their familiarity with your own finances, your good judgment, and your own research to decide how much you can afford, what interest rate is acceptable to you, and what you're willing to pay. These are some decisions you will face. The best way to choose between a mortgage broker, a loan officer, and a mortgage banker is to talk to all of them. Anthony Casa, president of the Philadelphia-based Association of Independent Mortgage Experts, said brokers can help borrowers get as much housing for their money as possible.
Mortgage bankers take your loan application, subscribe to it, approve it, and guide you through the closing process. A direct lender is a financial institution or private entity that actually provides the loan for a mortgage. Some mortgage brokers may charge you fees, but a great broker will be available with loan options and good information. The mortgage process can be complex and confusing, so being able to contact your loan officer directly to ask questions or make requests can be comforting.
Getting prequalified for a mortgage with both a bank and a mortgage broker can help you understand what your options are and compare offers. They can save you time and money by looking for the best deals available to someone with your financial profile, assuming you are honest, good at your job, and have relationships with many mortgage lenders. A loan officer comes at the beginning, during the buying phase, where you are trying to find the best deal for a mortgage. This could help you immediately see if your bank or a mortgage broker is likely to offer you the best rate and terms.
