Mortgage Brokers And Banks: How Are They Different

There are various pluses and minuses to consider when choosing to deal with either a mortgage broker or a loan officer at a bank when looking for a mortgage. While you may find that there are multiple variations between using either of the two, it will depend on your particular circumstances as to which one will be best for you.

Mortgage Brokers

These are real-estate professionals who earn a fee when they bring a lender and a borrower together, and they work as independent agents, rather than employees. They locate and evaluate potential home buyers, determine which lenders are appropriate for them after analyzing the applicant’s credit history, and are generally quite successful in what they do. Since their fees are based on the best arrangement they can make for the lender, home buyers should not discuss the interest rate they are ready to accept too readily. Instead, they should do some research and ensure that the terms of the mortgage are reasonable. (Note also that many mortgage brokers advertise online.)

If you plan to relocate, an online or local mortgage broker may be able to find you a lender in your new destination, but an online bank might not have an office in your area where a loan officer can have a face-to-face meeting with you. Also, here are some things to keep in mind in regard to out-of-town lenders:

? They may be unfamiliar with private septic systems or the various heating methods used in certain locations, and

? They may also have some difficulty in relating to the common terms and classifications that real estate appraisers use in a particular area.

On the plus side, a mortgage broker is often able to locate a loan that a bank has refused, perhaps because of some credit problem, and a mortgage for a unique or commercial property may also be easier to obtain if you work with one.

Bank Loan Officers

They are employed by a financial institution, and among other tasks, they are involved in selling and processing mortgages that are originated by the bank as lender. After receiving your application, the loan officer will try to find a mortgage that fits your situation, and if you receive credit approval, the transaction will be completed. Remember, bank loan officer works for the bank, so he is limited by the mortgage products the bank offers. This can be a serious hindrance if you need anything other than a plan vanilla loan.

You may find that dealing with a local bank will work in your favor, because their employees are familiar with the details of properties in the area and closing may take more quickly.

Your Role

Prior to meeting with any mortgage broker or loan officer, you will want to request copies of your credit report from the major credit reporting agencies. It is the information contained in these reports that will be crucial to either of them determining the type of mortgage they will have available for you.

Article Tags: Mortgage Brokers, Mortgage Broker, Loan Officer

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