In this series of posts outlining the mortgage application process while pointing out potential pitfalls, I said that I would answer some basic questions for you. Questions such as:
"Where do I start?"
"Should I go with a Banker or a Broker?"
Well, in our previous article, The Mortgage Application Process: getting a mortgage the right way!, we said that we would teach you how to "Select the Right Loan Professional." But before we go there, let's give you some answers to the ever-so-popular "Broker v. Banker Debate."
But I warn you, this debate can be a long-winded debate! We can go back and forth all day outlining the pros and cons of working with each. So, to make it easier, I have selected an article from Bankrate.com to share with you...
In an article by editor Holden Lewis of Bankrate.com: Banker or Broker -- which is better for your mortgage?
"Here are two questions that haunt home buyers: Should I use a mortgage broker or go with a banker? And what's the difference, anyway?
The short answer to the first question is this: It doesn't matter much whether you use a broker or banker. You can get a good deal with either. The important thing is whether you get a good rate and pay fair closing costs, not who you get the loan from..."
For Mortgage Industry News | Insights | Rate Trends and much more...
at www.industry-report.com
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Ricardo, you're doing some fantastic work with your blog and the articles. They really are geared to "typical" questions that buyers ask. Nice. Keep it up.
Ricardo, You are performing an excellent service and I must say I have recommended both originators and brokers - it all depends on my client's circumstances, Karen
While I agree that ultimately getting a good rate at fair terms is the best solutions, I am still baffled by the theory that a banker will offer the best options. Most bankers have a handful of products and operate on a retail level. Mortgage brokers get rates at a wholesale level and work with that one banker's handful of products and usually up to 100 other bank's programs.
Yes, some brokers will look to kill you your buyer on rate and fees, but I also worked in a retail bank once myself and the term "max rate / max fees" was thrown around my management everyday! What does matter is the professional you find that will take care of your client and offer the best options for your clients. 9 times out of 10 you will find the selection with a broker. Find a broker that offers the service and now you have found a partner in success!
Ed Nailor
Home Loans in Charlotte
Kris: thank you very much for the compliments! It was great connecting with you! I'll keep the articles comin'
Karen: I have to say that either model works (broker or banker) but like you said, it depends on the clients circumstances. If you went on to read the full post, I think that the person you select to represent you for a mortgage is what matters most. Ultimately, you need to select someone who has your best interests at heart.
Hey - I agree with Kris --- I am guilty as the next person with my blogs getting way off task, sometimes even acting as a sounding board. Great job your doing!
Great article. Keep up this kind of writing. Funny you quoted Holden Lewis ... he has interviewed us a couple of times over the years. You may also want to note that a Georgetown study on hundreds of thousands of loans demonstrated that it is likely you can save money on costs by going to a broker. Google "georgetown study mortgage costs".
Ricardo - ditto on the quality of postings.
Karen - please keep in mind that all loan officers, no matter whether they work as a broker or a banker, are all loan originators and get paid on the loans they originate. It just depends on the number of programs they have to offer and their ability to close the best possible deal for your client in a timely and stress free manner.