So you’ve finally found your dream house but can’t decide on how to push through with the whole mortgage process? You’re deciding between a broker and a bank, and here is the difference.
What is a Mortgage Broker?
A mortgage broker is a professional freelancer, who has access in the mortgage market. Unlike a loan officer, he or she does not work for specific money lenders; this independent individual simply serves as a connector between the bank and the borrower. The mortgage broker does almost all the work for the loan process – from surveying possible lenders to keeping transactions until the mortgage term ends. Your chosen broker is responsible in performing the following tasks: listing down possible mortgage lenders, assessing your credit history, completing all the required documents, collaborating with various agents, assisting you until the closing day, and giving you advice regarding your financial circumstances.
Mortgage Broker vs. Loan Officer
Both professionals are capable in assisting you in the whole mortgage process. However, a mortgage broker is neutral whereas a loan officer works for the bank. A mortgage broker may cooperate with different lenders presenting you the best possible option but a loan officer is loyal to the business terms of a specific lender giving you only the best possible offer of that bank. Having said that, a mortgage broker offers you the lowest interest rate in the market while a loan officer offers you a fixed interest rate. In terms of expanding your choices and getting the best mortgage offer, working with a mortgage broker may be the best for you.
Why Hire a Mortgage Broker?
In recent years more and more people have been switching to mortgage brokers. Mortgage brokers take care of the whole process, they know the ins and outs of the industry and have access to better rates and lending conditions. As opposed to a bank where everything is done by the customer and the whole process can take a lot longer. A mortgage broker can also be very helpful when your credit rating is low – they know non-traditional lenders other than big banks who are willing to give loan to people with adverse credit.