What’s the difference?
When it comes to Mortgage brokers, retail lenders and banks, many home buyers do not understand the difference a name can make. Though mortgage brokers, retail lenders and banks all work with you to get you a mortgage, there are key differences that consumers should know.
Banks and retail lenders use representatives referred to as loan officers who assess & assist consumers in choosing a loan product and applying for it. Loan officers are limited to only providing the loan products and programs that their employer offers.
- Loan officers are employed by banks, credit unions, or other retail lenders.
- They are not required to have a license to coordinate home loans for their customers.
- Loan officers only present potential homebuyers with loan programs and rates that their bank (i.e. employer) provides.
- A loan officer could be handling a wide variety of financial services and other types of loans such as car loans or checking accounts.
When you apply for a home loan with a bank or lender and they don’t approve you for whatever reason, or you’re shopping around to make sure you’re getting the best deal, this means you’re filling out an application for each individual lender and getting your credit pulled each time.
- Shopping mortgage rates with various lenders can be a time consuming and challenging task to undertake while also shopping for a home.
With a Mortgage broker, you only need one application. Rather than completing applications for each individual lender. Mortgage brokers use powerful loan-pricing software that has access to the latest loan information and pricing of mortgage loans across many lenders at one time, which speeds up and streamlines the process.
- With just one credit pull and one loan application, Brokers can shop and compare multiple lenders simultaneously within minutes.
This helps identify which lenders your application is most likely to be successful with, reducing the chances that you’ll be turned down.When you meet with a Mortgage broker, you are effectively getting access to multiple banks and lenders.
- Mortgage broker’s are specialists, they handle mortgages only and nothing else.
- In most cases, brokers can get you to the closing table faster than the big banks and retail lenders.
- A borrower who gets a mortgage straight from a commercial bank could end up paying more because of the bank’s overhead. Instead, a broker might be able to get you a loan with a better rate from the bank’s wholesale division.
- A Mortgage broker has access to several lenders and mortgage products at lower wholesale rates that banks and retail lenders can’t match.