Mortgage Brokers or Banks: Which is Right For You?

When you're looking for a home loan, you might work with an officer at a bank or other lending institution, or you might choose to work with a mortgage broker. The end result is the same - a new house, but the two types of jobs differ.

Bank Loan Officers: The loan officers at a bank, credit union or other lending institution are employees who work to sell and process mortgage and other loans originated by their employer. They often have a wide variety of loan types to draw from, but all originate from that specific lender.

The loan officer takes your mortgage application and works to find a loan product that suits your needs. If your personal credit is approved, the officer moves forward to process the home purchase transaction.

Mortgage Brokers: Mortgage brokers are professionals who are paid a fee to bring together lenders and borrowers. They usually work with dozens or even hundreds of lenders, not as employees, but as freelance mortgage agents.

Think of mortgage brokers as scouts. They find and evaluate homebuyers, analyzing each person's credit situation to determine which lender is the best fit for that person's needs. The mortgage broker submits the homebuyer's application to one or more lenders in order to sell it, and works with the chosen lender until the loan closes. A good mortgage broker can find a lender for just about any type of credit.

The mortgage broker working to secure your loan is earning a fee for that transaction - and the better deal they achieve for a lender, the more they are paid. Don't be too anxious to disclose the interest rate you would be willing to accept, let them tell you what terms they can secure. Shop around to make sure the terms are reasonable.

Many of the mortgage options advertised online are by mortgage brokers. What difference does it make? Maybe none, but you should be aware of the differences between the two positions. A local or online mortgage broker may find you a lender in another part of the country. An online bank might not have a local office where employees can help you one-on-one.

Mortgage brokers can often find a lender who will make loans that a bank refuses. Problem credit is one example. Loans for unique or commercial properties might be easier to secure through a mortgage broker.

About the Author

Lana Hampton makes it easy to find the mortgage right for your needs. Visit http://www.yowsmortgage.com today for the latest mortgage information.

States Warned About Mortgage Crisis (NBC 5 Chicago)
State whistleblowers tried to curtail greedy lending - and were thwarted by the Bush Administration and the financial industry.

Don't blame low-income mortgage program for meltdown (Everett Herald)
I was raised by a grandmother who had to assign blame when anything went wrong. For Big Mama, there were never any accidents. When I got into a car crash while driving her to a doctor's appointment, she blamed me. Never mind that it was the other driver who failed to yield the right of way.

Brokers Selling Foreclosed Homes Have a Tough Job (Newsweek)
Selling foreclosed homes is a growth industry for brokers. But some of the properties are disgusting.

Mortgage system crumbled while regulators jousted (Seattle Post-Intelligencer)
Federal bank regulators fought over turf with state agencies while America's mortgage lending system grew increasingly unstable and then fell apart.

Minnesota’s small and mid-sized banks still doing well (Finance and Commerce)
Many of the nation’s biggest banks are in trouble, hobbled by huge mortgage losses, heavy leverage and a collapse of faith. But their much smaller siblings among Minnesota’s community banks are generally doing just fine, keeping capital flowing into a surprisingly busy local small business sector.

Home page

Information Index