If you’re just starting the home buying or refinancing process, you may have a lot of questions and stress about the financing part. One of the questions may be whether you should choose a direct mortgage lending company, a mortgage broker, or a bank to process your loan.
The common thread is that most are experts in their industry and can help you throughout the entire mortgage process. However, there are some notable differences between the three and understanding the nuances can help you get better rates and closing costs, and can affect how quickly you close on your home, which can mean everything in a competitive market.
Below we describe how each can help with your home financing needs and highlight their differences and advantages.
Direct Mortgage Lenders
The biggest advantage of working with a direct lender is the personal level of care and attention you get. The lender is intimately aware of your needs and involved in the entire process which is helpful when securing the best possible mortgage option. A lender is also specialized in mortgage-related services which gives a deeper level of expertise when compared to banks who handle multiple services at a time. Additionally, lenders have more freedom to work with lower credits scores and have a wider variety of guidelines that are more fluid than banks.
Mortgage Brokers
A mortgage broker acts as the liaison between you and the direct lender or bank. They can also handle all your financial documents and shop for the best mortgage terms for your needs. Having them do the shopping for you is perhaps the greatest advantage of working with a broker but they have no control over the disclosures and requirements as those are set by the end lender. Just remember they do charge for these services and your closings costs will typically be higher than what you’d pay using a direct lender or a bank.
Bankers
Working with a bank to process your mortgage is not unlike working with a direct lender. The difference is that as we mentioned above, a bank will have more rigid requirements and guidelines. Also, a mortgage loan officer at a bank is typically not licensed whereas those that work for a direct lender or a broker are. While an advantage of having your mortgage held at your bank can be convenient, it should be noted that most mortgages are sold to a new servicer three to four times over the course of a loan.
Now that you know the differences and advantages of working with lenders, brokers, and banks you can see how working with a direct mortgage lender like US could save you money and time.
If you’re ready to take the next steps toward your home financing needs, talk to US first! We have over 20 years of experience working with some of the most unique loan requirements and are at the forefront of some of the most innovative loan solutions that will suit any of your home financing needs and concerns. Let US help you achieve your home ownership goals.