Are you ready to purchase a home? Whether you’re looking for Denver CO luxury condos or a modest starter home in the country, one thing you will have to determine is if you want to obtain your mortgage loan through a mortgage broker or through a bank loan. To help with making this decision, it is important to gain a better understanding of the pros and cons that both options have to offer.
Getting a Loan Through a Bank
When getting a mortgage loan through a bank, credit union or other lending institution, the entire loan will originate from one lending institution. While that institution may have several different types of loans to select from and many employees may be involved in the loan process, the entire loan is handled through just one institution.
Working with a Mortgage Broker
If you choose to obtain a loan through a mortgage broker, you will gain access to the mortgage loan options that are available through a variety of different lending institutions. This is because the mortgage broker does not work for any particular lender. Rather, the broker has forged relationships with dozens of institutions and he uses these relationships to find the best deal to suit your needs. When hiring a mortgage broker, you will have to pay a fee for his services. If the mortgage broker is able to find a better deal than you could find on your own or if the mortgage broker helps you save time, however, this cost may be worthwhile.
Mortgage Broker vs. Bank – Which is Better for You?
For those who do not have the time to compare a variety of different lender options or for those who are uncomfortable with understanding mortgage loans, hiring a mortgage broker a help to reduce stress and confusion. This is also true for those who have poor credit, as finding a loan through a lending institution may be difficult without the help of a broker. When meeting with a loan officer at a bank or other lending institution, you will find that there is no incentive for that person to approve your loan. In fact, if your credit is poor, the loan officer has no reason to take a risk in order to approve your loan. A good mortgage broker, on the other hand, can find a loan for just about anyone with any type of credit. After all, the broker’s income is dependent upon finding a lender on your behalf.
In short, if your credit is solid and if you are comfortable with exploring the mortgage loan options that are available to you, working directly with a lending institution is probably the way to go. If you have poor credit, if you are uncomfortable with comparing loan options or if you simply don’t have time to shop around, hiring a mortgage broker may be the way to go.
About The Author – Brian Kincade specializes in Colorado luxury condos, including Landmark Condominiums Greenwood Village, and is broker of The Home Cart team in Denver, CO.