Mortgage brokers vs. banks

There are many different ways to finance a mortgage, but I'd like to focus on two specific channels,"mortgage broker versus Bank."

There are mortgage brokers, who work as intermediaries between the banking/mortgage lendinginstitutions and borrowers the wholesale end to secure finance for homeowners. And there are banks and lenders that work directly with the landlord to provide financing in the retail level.

Mortgage brokers are a big part of the mortgage business, accounting for more than 10 percent of all home loan originations.

In fact, the share of the mortgage pie as high as 30 percent of the mortgage boom, but falling rapidlyafter the mortgage crisis happened after that.

But the broker still serves an important role in the industry, and can be fully beneficial for bothhomeowners and those looking to refinance.

Pros and cons for both

There are pros and cons for both, and sometimes you will have little choice between the two if youhave bad credit or a difficult loan scenarios.

The majority of homeowners turn to banks when it comes time to get a mortgage. They are the most obvious choice, mainly because the conventional home purchase loans service offered at the base of the main Bank's customers.

However, the borrower has difficulty eligible need to finance the difficult transactions will often getturned against the Bank. So, for these people, using a mortgage broker is often the next best option.

Of course, the price with the mortgage broker may be competitive as a Bank, so long as the brokerdoes not take too much off the top. Wholesale prices can actually be cheaper than retail interest, youwill get with the Bank.

For example, I know a mortgage consultant who worked at Wells Fargo retail bank branch (for example using a bank directly), and the rate is much higher than the wholesale division with Wells Fargo. And the only way you can access their wholesale rates is through a mortgage broker.

Of course, most lenders will try to secure finance with the Bank or their local Credit Union beforestepping into a mortgage broker. The banks are apparently is the choice for reliable and familiar, andusually provided with the borrower, a discount based on a pre-set relationship.

Because the banks have a large amount of information about customers, such as the balance of yourchecking and savings account of the borrower, the qualifiers can be more easily and can lead to alower rate.

A broker will only be able to verify that information with the cooperation of the borrower, and canchoose not to provide certain information to the lender. The lack of information (stated income loan)can lead to a higher interest rate.

The advantage of working directly with the Bank:

-Build off existing relationship (discounts if you have a checking account/archive)

-You know the Bank staff will process your mortgage

-Probably more reliable, more responsibility than a smaller store

-lower interest rates in some cases

-Additional functions for automatic payment mortgage records of existing banks and done from the account link

The downside of working with the Bank:

-Conservative lending program

-Don't disclose the yield-spread premium

-lengthy process, very bureaucratic

-False promises

-They make mistakes

-Can sell too expensive (roses do not need to be disclosed)

-impotence (poorly educated about the home loan process in some cases if they are just generalbanking or customer service types)

Advantages of working with a mortgage broker:

-They do all the work for you, work with the lender on your behalf

-They compare whole sale mortgage rates from a large number of banks and lenders all at once

-wholesale interest rates can lower (branch of the Bank) the retail interest rates

-You get more loan options because they work with many banks and lenders

-can broker transaction financing difficulties because of their knowledge and the different lendingpartners

-There are often easier to get exposure, less bureaucratic

The downside of working with a mortgage broker:

-They make mistakes like anyone else

-Can sell you expensive too (how mortgage brokers make money)

-False promises to get your business

-impotence (at least learn about home loan process in some cases, if new people)

-May not have access to the program with select banks (main vary significantly)

That said, your experience can really change based on who you choose to work with, such as anumber