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Mortgage Broker VS. Mortgage Bank

By: Devin Valdez

 Obtaining a mortgage loan is one of the first steps you will take when trying to purchase a home. Once you’ve decided to take out a loan, one big decision you may come across, is whether to get help from a mortgage broker or directly from the bank.

Although both outlets are providing the same service in the end- helping you get a loan for your home- your experience and process with each can be polar opposites.

Below is a list of differences when dealing with a bank and a broker.

The Broker

It’s important to know that brokers work as the middleman between you and a potential lender. Brokers DO NOT LEND OUT MONEY DIRECTLY, their job is to access and compare rates and prices between multitudes of lenders, which can usually offer you much more options than a bank will propose. Plus, the wholesale prices that brokers can receive with each lender, have a habit of presenting lower interest rates. And the options do not stop at rates. Brokers are also more flexible in the type of loans they can offer you. They have the ability to shop around multiple lenders to help you find the right loan program for your specific needs.

Moreover, you can say goodbye to piles of paperwork to fill out, because a broker has that handled. Brokers do all the legwork for you, you just have to provide them the information they need. Also, because brokers are working for their commission, they tend to hustle harder to ensure you, the client, are satisfied and your needs are fulfilled.

If you’re the type of person who likes to work closely with someone doing a job for you, a mortgage broker may be your better choice. Brokers are likely to be easier to get in touch with, and more personal. They don’t have the stress of working at a big bank with an overwhelming amount of clients. This advantage gives them a chance to take the time to get to know you.

Lastly, if your loan comes with a few hiccups, brokers may be the better choice due to their knowledge of many lenders and each lenders’ strengths, and their knowledge of the financing game.

The Bank

            The bank is the source that will DIRECTLY LEND YOU THE MONEY for your loan, thus giving them the control in your loan situation. The one who loans the money, is the one with the control. If a mistake is made, it is possible that it can be fixed quicker than with a broker, because the bank is dealing with itself.

Lastly, banks may favor you, if you are a client that they’ve had for years, and already have existing accounts with. They may offer you discounts for your loyalty, and you may find it more appealing to deal with bankers you are already familiar with.

For more information about obtaining a loan, please contact one of our seasoned agents at 510-537-1900.

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