Utah Realty -
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Mortgage Brokers, Mortgage Banker, Banks and Credit Unions
What's the difference?
So how do you go about finding the right Loan Officer or help you with your mortgage loan? What are the advantages and disadvantages of getting a mortgage loan with a mortgage broker, banker, bank or credit union?
By Marty Gale
When an individual is shopping for the right loan, they need to decide which is best for them. There are advantages to all types. There are disadvantages too. With so many choices of lenders and mortgage options available it can become confusing. With each person brings, they will bring there own personality and experience to the table. As a buyers agent is usually try to match up the buyer with a lender that will suit the needs of that particular person. It pays to do some up front research on your own making sure you are knowledgeable and prepared.
Banks can have benefits but often times you might not be their priority.
Having a good history with a bank will help. If you have not done any business with the bank you may find regular customers of a bank, those individuals with several accounts, a credit card, and/or an automobile loan, might receive special consideration in terms of the rate or other financial aspects. The longer and more extensive the customer's history is with a particular financial institution, the more likely it is that they will be approved and receive a good deal. We work with banks and tend to stick with one to make sure our clients get the treatment they deserve.
Banks will often time have very good in-
It is always good to use your Realtor to help navigate rates and programs. Translate the financial jargon and explain the pros and cons. (We do this all the time)
A guide through the maze -
Mortgage broker has to sell the loan first usually a smaller outfit.
A mortgage broker is just that. The loan has to be sold to a bank prior to even funding. With the new banking rules you won’t see too many mortgage brokers around.
A Mortgage Banker will have an in house funding source so they fund then sale the loan on the secondary market. Larger and more stable with a wide array of programs, lower fees and better rates.
The biggest advantage of mortgage bankers is that they know the business. They are aware of the entire market. They follow the trends, know what mortgage products are available and are aware of which institutions might be offering special discounts. They may know of exclusive deals that are not offered on the open market. They are able to identify the most appropriate lender for the specific circumstances of a borrower. Mortgage Banker can be a great asset when it comes time to find the mortgage.
Another significant benefit of the Mortgage banker is that they handle the paperwork and the interaction with the institutions. Saving a lot of time, work and stress. Because brokers develop professional and personal relationships with representatives of lenders, they can frequently reduce the processing time of an application.
Credit Unions -
We just refinanced with a Credit Union. We got a rate below 3.5% and a shorter term 15 years.
Weighing the pros and cons
Each person must make there decision based on the individual situation. There is no real "correct" answer for every borrower. Study and compare the options. Use the resources available to you. Check out consumer agencies and government sites, state sites. Best advice ask your Real Estate Agent, friends, family and professionals who have been through the process.