Banks vs. Mortgage Brokers
Banks are obviously the direct lenders. They are the financial institutions that offer loans with interest rates based on your financial situation.
Mortgage brokers, on the other hand, act as an intermediary between lenders and borrowers with an understanding of the expectations on both ends.
Key Differences when you get your mortgage done through a bank versus a mortgage broker
If you are in the middle of the decision to apply for a mortgage directly through a bank or a mortgage broker, here are a few major differences to take into account to help you make up your mind:
- Strong VS Weak Application
Get your mortgage done through a bank if you have: strong credit, income, and assets. You must submit your application followed by necessary documentation and wait for the approval. Even then, if the bank does not find some requirements being met, your application can get rejected and the bank may or may not disclose the reason for doing so.
A mortgage broker, on the other hand, will take into account your past and current history and provide you the best possible solution to maximize your chances to get your application approved, especially for the financial areas you need help with.
- Different Mortgage Products
Mortgage shoppers are mal informed about which banks offer a certain type of mortgage. The several types of mortgages are conventional, fixed-rate, variable, open and closed mortgages.
You may also not have an idea which mortgage type works best for you.
A mortgage broker can guide you to a specific kind of bank that readily accepts loan requests that fit your current need. Without this information on the table, you may end up getting preemptively rejected by a bank.
- Different Interest Rates
A bank offers you only what is on its portfolio and may also not be flexible on interest rates.
If you must go through a bank, do the homework for comparing the interest rates offered by various direct lenders and choose the one which offers the best rates. The role of the mortgage broker thus becomes vital. They have a fair idea of the multiple mortgage plans and offers that different banks currently offer. So, you get lower interest rates, suitable terms and benefits, customized to your financial needs.
- Multiple Quotes for Loan
Mortgage brokers look up the best solutions for you and thus do the basic research on your behalf, so you get several best quotes from multiple banks. A direct lender may not provide multiple choices in this regard.
- Complete Details:
If you are looking for good consultation and advice for documentation, you receive advice on closing rates, loan types or loan programs by direct lenders all year round. They even outline their compensation fees on your closing statement, so there are no hidden charges and you have a clearer idea of your repayment, completely.
A bank will also require from you to submit necessary documents as proof of yout current and past financial situation, but may not provide you all the information about any advantageous loan programs. A bank can also reject you, without information of why it did.
Assistance in loan processing by a mortgage broker from beginning to its finalization can minimize the hassle and time consumption and prove financially beneficial for you in the long run.
Joe Purewal has over 20 years of experience in the mortgage industry. They have seen every possible problem and has always given the best solution to their clients.
With Joe Purewal and its team, rest assured, you are in good hands. Their specialists will get you the pulse of current mortgage rules in your area, and the lowest rate for your situation.