Should I Get A Mortgage From A Bank Or Broker?

 

Brokers

A mortgage broker works with various lenders, providing access to several products at various prices. This means you have the freedom to compare different loan packages from the same broker. A broker also explains the various closing costs, interest rates, and any other detail to you, making choosing the ideal loan package easier. However, the only way to compare the various loan packages from a broker is to apply to them separately to evaluate them yourself. Although that might sound like a long process, every lender provides a standard estimate form with all the necessary info about their offers. This way, you can compare the packages easily. 

A broker will assess your financial standing when suggesting suitable loan packages to you. Current legislation mandates them to prove that they have assessed your affordability before presenting suitable loans. This process reduces the financial risk on the lender, although also making it more difficult to access a mortgage. 

You might want to opt for what you consider a cheaper option when looking for a mortgage, especially considering how expensive purchasing a new home can be. In most cases, that means going to your bank. But, trying to avoid paying the broker fees can now cost you a lot of money if you choose a lousy mortgage deal instead of using a broker. Plus, you will now find loads of brokers out there that charge no fees. 

You may believe that you know your way around the mortgage industry, but you may need a broker to show you some tricks to accessing exclusive deals and more extensive mortgage ranges. Your broker can also assist in getting you prepared ahead of time and speeding up your application process as a result.

Pros

  • A broker has access to packages with varying interest rates from various lenders.
  • They can make special packages available that suit your particular needs.
  • You have more freedom to negotiate a broker’s compensation which is available on your closing statement.  

Cons

  • Since a broker doesn’t work directly for the lender, they have less control over the underwriting process. That means they can’t do much if a lender decides to delay your application process.
  • A a broker’s services are usually expensive, even though you can negotiate with them. That’s probably because of their ability to access more complex and unique loans. However, if time is of the essence to you, you might want to use a broker, as brokered loans tend to take a more extended period to close.

 

what do you need for a mortgage

Banks

You also have the option of getting a mortgage directly from your bank. Here, you have to inquire what the different pricing options are and negotiate the fees and loan rates you want. 

Pros

  • Banks may offer special or preferential loan rates for those who already have accounts or do business with them.
  • Some banks provide specific exclusive deals or special packages that a broker might have no knowledge of or cannot access.
  • Getting a mortgage from a bank does not come with broker fees. 

Cons 

  • A bank will only offer advice on the packages they offer, and it’s usually biased. 
  • Furthermore, you will not access broker-only deals here, even if your bank makes them available to you.

No matter which option you choose, you need to research both options to find out what is available that suits your unique situation. If you would like more information on how a mortgage broker like us can help you, contact us today.