Should You Use a Mortgage Broker or a direct lender?

Buying your first home or investment property is exciting. It is probably one of the biggest purchases most people will ever make, which is why getting it done right is crucial. As thrilling it is to buy a new home or investment, it can be the most nerve-wracking, too, because getting a mortgage and closing the loan can be a long, complicated process.

Shopping for a mortgage and getting it approved is one of the most important parts of buying a home. Soon as you are ready to kick start your buying process, you will need to figure out where and how to shop for a mortgage loan that suits you. There are a number of lenders out there to pick from but the question that arises is whether to go directly to the bank/lender or get a mortgage broker. It is a reasonable question, given how lengthy and complex the process can be. It does not matter if you are refinancing or buying a new real estate, you will need to work out the loan application and navigate through all the offers to secure your funds. Banks and brokers are both good choices but understanding how both functions will help you determine the best option.

Here’s how Mortgage Brokers work and their advantages?

A mortgage broker acts as a middleman between the mortgage lenders and borrowers when shopping for a mortgage product. When buying a real estate or refixing, a mortgage broker can help you identify the best suited mortgage offer to your specific needs and situation. Brokers not only help you get the most competitive rates and prices, but they also check and verify whether the offered loan is a good match with the lender. An experienced broker will be quick to determine the best lender for each individual borrower. They simplify the loan process for you as they work with everyone involved in the lending process – from the real estate agent to the underwriter, closing agent and mortgage lenders– to make sure a borrower gets the best loan and the loan processes quickly and closes on time.

It is our job to “do the math” and provide you the information on what size mortgage you qualify for. We help you get the best deal for your loan and save money by researching various loan offers. We even negotiate with lenders on your behalf so do not overspend.

Finding the right loan is just a part of the process. A broker can also pull the buyer’s credit reports, verify their income and expenses, and coordinate all the loan paperwork. Many brokers have access to a powerful loan-pricing system, as well, which prices a mortgage loan across many lenders at one time, thereby speeding up and streamlining the process.

If you are looking to get your first home loan approved, for example, finding a mortgage broker with extensive experience working with first home loans can make the process more swift and quicker. We represent multiple lenders which gives us access to a wide array of products for you to choose from. We work with a variety of lenders, including banks, credit unions and private mortgage companies. So, if you have a less than perfect credit, are self-employed or have any other special circumstances, this extra flexibility can help you find the best fit.

Mortgages have a lot of working parts: interest rates, down payments, origination fees, points and more. And a good broker can help you understand how each of these variables work together and what makes one loan a good value compared with another.

So, what happens when you approach a lender directly?

The downside of working with a bank directly is that it can cancel out many good options available in the market. If you wanted to compare the loan rates and programs from different direct lenders, you would have to apply to each to one separately and do the evaluation yourself.

A mortgage broker also has access to more lenders and mortgage products than a bank loan officer, who is limited to the mortgages provided by the bank. A direct lender only provides you with limited options and the potential of the bank next door providing a better deal will be left unexplored.

Banks are bigger companies who do daily loan applications and there is a chance your loan will not be personalised to your needs. And if you work with a broker, it is likely you will have more human-to-human contact as the two of you work through your loan application. Why go through the difficulty of doing everything yourself while missing out on a better deal, reach out to us today and we will get your application going in no time.

Recommended Posts