Buying a home is by far one of the most important purchases you’ll ever make. Most buyers spend weeks, maybe even months looking for the perfect house. But when it comes to financing that purchase, all too often, the buyers are willing to take the first loan that comes along.
This mistake can cost thousands of dollars in over paid fees and interest over the life of the loan.
Many buyers make the assumption that if they go into their local bank, they are more likely to get a loan approved because they are a current customer. They may think that local bank are faster. Both of these assumptions are also costly mistakes.
The truth is that a savvy buyer pays more attention to the loan than they do the house itself.
What options do buyers have? What is the difference between the local bank and a mortgage broker?
To sum it up, the difference is CHOICE and OPTIONS.
When you walk into a bank, whether it be a small credit union or a well known, nationwide bank, you are negotiating with one employee that is authorized to make you a mortgage offer. They’ll pull one credit report and decide whether they want to offer you a loan or not. If they choose to offer you a loan, they’ll most often give you one set of terms, and you can take it or leave it.
Mortgage brokers, on the other hand, do not work for a bank.
They work for you, the buyer.
Since mortgage brokers do not represent any one bank, this works in your best interests. How so?
Let’s take for example a buyer with a very good credit score and a down payment. A mortgage broker can shop around, so to say, for you, with literally dozens upon dozens of different banks, so that you get the best offer.
If your credit is not that great, you MUST use a mortgage broker! It would take you countless hours to go to all the local banks applying for a loan, not to mention it would pull your credit down even further with all of the credit inquires! In addition, you wouldn’t even know about nation wide banks that are willing to lend. However, armed with your mortgage broker, they can do all of the work for you, and your chances of getting a loan increase dramatically.
Why can we say the NOT using a mortgage broker could be the worst decision as you buy a home? Simply put, because you need to hire a broker to get you the best loan. You DON’T need a bank employee that represents the bank.
Using a mortgage broker will save you money, time, and frustration. And at the end of the day, you’ll be able to feel confident that you made the right choice.