Home Loans – Mortgage Broker Versus Banks, Who Should I Use in Kingwood ?

Home Loans - Mortgage Broker Versus Banks, Who Should I Use in Kingwood ?
Home Loans – Mortgage Broker Versus Banks, Who Should I Use in Kingwood ?
There are a variety of different ways to get a home loan, but let’s focus on two specific options, "mortgage brokers versus banks."
There are mortgage brokers, who work as middlemen between banks/mortgage lenders and borrowers on the wholesale side to secure financing for home buyers.

And there are banks/lenders that work directly with home buyers to provide financing on the retail side.

But mortgage brokers serve a valuable place in the home lending industry, and can be quite beneficial for both prospective homeowners and those deciding to refinance with cash out their mortgage.

There Are Pros and Cons to Both banks & Brokers

• Both can be a great choice for home buyers
• But it depends on your loan situation
• And your individual needs
• Compare the 2 to ensure you get the lowest interest rate and lowest fees.

There are pros and cons to both options, and occasionally you will have no choice between the two if you have bad credit or a out of the box loan scenario.

The majority of first time home buyers turn to banks or large home lenders when it comes time to get a home loan. They are the best known option, mainly because home loan services are usually offered at the borrower’s primary banking institution.

This provides for one-stop shopping, not to mention some degree of trust and easy engagement. In short, it’s the quick answer for someone looking to submit a mortgage application.
Borrowers who have a problem qualifying for a mortgage or need to mortgage tricky deals will often get turned away at the big that don’t necessarily specialize in home loans. So for these buyers, using a mortgage broker is often the first option.

Brokers usually have access to far more loan products and types of mortgages than a big bank, whether it’s FHA loans, VA loans, jumbo loans, a USDA loan, or simply a borrower with tough credit.

If you go with a broker, you might end up with a more personalized loan experience, where they can provide solutions to your problems, whether it’s a low down payment, limited credit history, or the desire to reduce closing costs and/or alleviate PMI.

You might feel a bit more involved in the home loan process versus using one of the established financial institutions out there, though not everybody needs to talk to a human being, or see them face to face.

There are plenty of home loan companies and internet mortgage lenders that pride themselves on doing the mortgage remotely, via fax or even text. No phones required! Well, smartphones yes, actually dialing them no.

The mortgage application processes could also be quite different. A big bank might just tell you that your fico score is too low, whereas a broker may explain how credit scoring works, then make options like paying down some credit cards or student loans to make you eligible in the future.

The takeaway is that most established banks likely won’t go the extra mile for you, whereas the broker might seek and find solutions if/when any roadblocks present themselves. And part of that is because a broker can turn to multiple lending partners, whereas a single bank is at the mercy of its single suite of loan programs.

For someone who may need a helping hand, or simply deserves more attention, perhaps a first-time home buyer, the Broker will be the better choice.

What About the Interest Rates?
• Mortgage Broker Interest Rates can be better
• Compare wholesale and retail interest rates.

• To ensure you don’t pay too much for your mortgage loan
Of course, pricing with mortgage brokers can be every bit as competitive as a bank, as long as the mortgage broker doesn’t take too much off the top. Wholesale rates can actually be much cheaper than retail interest rates you’ll get with banks, meaning a better monthly mortgage payment.

I know a mortgage consultant who works at a Big Five retail bank branch (example of using a bank directly), and his mortgage rates are much higher than Wells Fargo’s wholesale mortgage division. And the only way you can access their wholesale rates is with a broker.

Of course, most first time home buyers will attempt to secure their mortgage with their area bank or credit union before turning to a mortgage broker. Banks are generally the more trusted and default option, and often provide home buyers with discounts based on a pre-established relationship.

Because the bank already knows a great deal of information about the client, such as the balance of the borrower’s checking and savings accounts, qualifying can be easier and could result in a more competitive rate.

A mortgage broker will only be able to verify such information with the home buyer’s cooperation, and may choose not to provide certain i…

Home Loans – Mortgage Broker Versus Banks, Who Should I Use in Kingwood ?