LEEETTT’S GET READY TO RUMMMBLE!!! It’s Mortgage Broker vs Banker: The Ultimate Smackdown! Who will emerge victorious? Who will provide the better deals? Who will earn the right to wear one of those ridiculously oversized championship belts?
Are you wrestling (get it?) with whether or not to use a mortgage broker or a banker? You’re not alone. The question of which one offers a better option can be difficult to sort out, and this article is going to give you a few guidelines to use when you’re shopping around for your own mortgage product. And in this corner …
At first glance, it appears mortgage brokers have an obvious advantage over individual bankers because they have a broad knowledge of the industry and of the products that are available from a wide pool of lenders, some of whom may be located hundreds or even thousands of miles away from you. Brokers know which lenders will be most likely to work with specific borrowers which can be an important consideration for buyers in special circumstances, such as those with poor credit or those who are self-employed. And they also can identify lenders who are offering special discounts or programs that may not be available on the open market.
OK, so that’s the good stuff. Now here’s the downside: Brokers don’t work for free, and that means that either you’re going to have to pay their commission or the lender is. Borrowers with poor credit often find themselves facing some pretty stiff fees. What’s more, brokers may be motivated by larger commissions from specific lenders, which means they might be biased toward the lenders who offer the most money. It was that kind of bias that was a least part of the cause of the mortgage meltdown a few years ago.
If you have an established relationship with a bank – maybe you’ve been with them for years or have a few different accounts already – you may be able to get exclusive discounts through your lender. While it used to be a hassle to look for loans from different banks, the Internet makes searching for a loan and getting a quote much, much easier. Of course, banks will be promoting only their own products and comparing products from different lenders can be a time-consuming process. You also might want to do a little reading about the lending process before you actually sign any loan.
Actually, it’s not that simple. Whether or not you go with a broker depends on your own comfort in shopping around on your own. Generally speaking, unless you have poor credit, you’re self-employed or you have other special circumstances that require access to a broader range of options, going it alone can save you the cost of a broker fee and taking time to really understand the mortgage process can also make you a smarter consumer overall. For best results, talk to friends and family members about their experiences before you make your decision.