Mortgage brokers vs Banks and Mortgage lenders

Two people shaking hands over a table.
If you have searched for a mortgage company you will notice there are banks and large mortgage companies, then there are mortgage brokers. Is there really much of a difference? What are pros and cons of using mortgage brokers vs banks? We’re going to explain the differences of Banks and Mortgage Brokers in this article.
 

What is a mortgage broker?

A mortgage broker acts as a middle man between the homeowner and the mortgage lender. A broker will prepare your loan application, financial documents, and issue mortgage pre-approvals just like any lender can. A mortgage broker works with several mortgage lenders and banks and submits your loan file to them to issue the loan. Brokers get paid commissions from lenders for completing your mortgage application and documents.


How do Banks and Direct Lenders work?

A Bank or direct mortgage lender is the company that is actually funding the loan. You will work with a loan officer that is an employee of the Bank. Often, Banks are licensed in most, if not all 50 states. The loan officer only has access to the home loan programs that lender offers.

Who can give me a better deal- a mortgage company or a mortgage broker?

There are some things to consider when choosing whether to work with a mortgage broker or a Bank/ Lender. Mortgage brokers save you money because they have access to many lenders and programs. Brokers are paid commissions by the mortgage company.

When working with a Bank, that loan officer only has access to their own mortgage programs and mortgage rates. You could be getting a better deal with another Bank or a Mortgage Broker. You should always speak to at least a broker to compare the loan offers. This way you can ensure you really are getting the best deal on your home loan. JM CAPITAL GROUP will help walk through the process and show you why we can get you the best rates for your situation.