BROKER vs BANK

Who to Choose?

A good Mortgage Loan Officer (MLO) is one of the most valuable assets in the home-buying process.  Oh, you thought rate was the way to choose.  Nope.  Of course you want and get the best interest rate.  And you will.

In today’s market, government regulations have evened the playing field.  Rates are based on fair housing, and no longer set by the individual representative.  What may be different are guidelines, processes, good appraisers, timelines, and frustration vs. an easy experience.

A customer-focused loan consultant and lender can be the key differentiator in your home buying experience.  You may be thinking… how do I choose?

Broker or Big Name Bank?

Here is a quick overview (from experience working with both):

Broker 

  • Mortgage Bank that has its own money to lend
  • Specializes in mortgages, no other products
  • Nationally and locally licensed Mortgage Loan Originators
  • Can close in 30 days or less
  • Competitive rates
  • Conforming programs (FHA, VA, Conventional, etc.)
  • Non-conforming loans (lower down payments, lower credit, etc.)
  • Dozen of investors to shop from with few overlays
  • Less “layers” of people to go through

Bank

  • Recognized brand name
  • Has their own money to lend
  • Offers a range of products, mortgage is one of them
  • Representatives are not licensed or tested
  • Closing average 45 – 60 days
  • Will hire or layoff staff regularly depending on volume
  • Good rates, often quoted with discount points
  • Conforming programs (FHA, Conventional, etc.)
  • Loan programs have “overlays”, added restrictions to Fannie Mae guidelines
  • They are the investor, and set the rules
  • Corporate rules and approvals

Online Only Bank

  • Not local (may not know the costs and available programs of Florida!)
  • After application, communication is email or 1-800#
  • Representatives not licensed, usually work in a call center
  • More fines and lawsuits than other types of lenders

Top 7 Questions To Ask Your MLO

Get to know your mortgage originator.  They manage the financial process from pre-approval to closing.  It is important to have that good “gut feeling”, or to work with someone referred by someone you trust.

  1. What types of loans do you specialize in? Which is right for me?
  2. How frequently should I expect to hear from you during the loan process?
  3. Will you be in contact with my Realtor and other parties involved in my purchase?
  4. Will you watch the market for me? How?
  5. Who does your loan processing?
  6. How long does the process usually take?

A good MLO knows the market, and will give you the best options for your circumstance.