There is no easy way to decide between a bank and a mortgage broker when you are looking for the perfect mortgage for your needs. It becomes complicated when there is such a wide variety of mortgage products and each applicant has different needs. To make it worse, all these finance and mortgage options are usually being revised and changed. This means that a lender that had a great product a few months ago may not have the same product to offer today. Happily, there are some general guidelines that can help deciding between a bank and a mortgage broker easier.
First of all, banks have a tendency to be conservative than brokerages; their policies and practices are traditional and they will only offer you mortgage products from their institution. Banks know that having more products to offer will help them gain return customers. Because banks only offer their own line of mortgage products they usually offer better terms and discounts to their customers. Bank customers that have substantial holdings in two or more accounts should consider getting their mortgage at their own bank first.
If the potential home buyer does not already have a strong relationship with a particular bank, then going through a broker may be more appropriate. A broker usually represents a number of different lenders selling different lines of products. A good broker can review an individuals circumstances and recommend a specific lender and product that can best meet the clients needs. Further, a broker will provide advice on how to present the clients financial information and will do much of the leg work involved in getting the process underway.
Some brokers charge fees at the beginning but for the most part brokers do not receive payment until the loan is closed. This means that on the one hand, a broker will be highly motivated to get their clients approved for mortgages. However, it also means that brokers may be indiscriminate in getting a client approved for a loan, without real regard to their individual needs. In 2007 the sub-prime mortgage bubble burst and inappropriate mortgage approvals directly impacted that situation.
Once the decision to use a mortgage broker has been made the next step is to make a list of brokers to check into. Start by gathering names from friends and family who have worked with brokers, and also the names of local brokers. Then you can begin to research, making sure they are properly licensed, if there are many customer complaints about their service, and if the broker has had legal difficulties. You can check this information with news sources, the Better Business Bureau, and the Attorney Generals website. At this point the list should only include those brokers that have a sterling reputations and no problems with licenses, legal problems, or customer complaints.
Once the client has a list of several reputable brokers, he should consider going in to initial consultations with several of them. This is because each broker has a unique list of lenders that they deal with, so one broker may have access to a much better product than another. After having initial consultations with several brokers, the home buyer should have a good idea about which one can offer the best product.
Wendy Polisi is the founder of Credit Repair College and Finance the Dream. Credit Repair College empowers people to take control of their financial future by learning everything they need to know to repair credit on their own. For more information on credit repair secret please visit them on the web. Finance the Dream offers lease option homes throughout the United States.