Are you currently seeking a home loan? If so, then you are likely aware of the two primary paths for obtaining one: Going directly to a bank or working with an experienced mortgage broker. Both provide comprehensive mortgage services, however they operate in very distinct ways. When searching for your perfect loan option and interest rate, it is important to consider both avenues before signing on the dotted line!

Whether you’re a first-time homebuyer or an experienced investor, a broker is your trusted guide to finding the perfect mortgage product. They will look at multiple lending options in order to secure the best deal for their clients and make sure that it meets all of their financial requirements and timelines. With an independent broker on your side, you’ll be able to rest easy knowing that they are doing everything possible to get you into your dream home!

Bankers are devoted to their financial institution – all the while aiming for one principal objective: obtaining profits by providing loans to borrowers.

When choosing between a broker or banker for your home loan, here are some essential things to consider.

Brokers and bankers differ in the loan products they are able to access, with bankers strictly limited to whatever their bank provides. Additionally, they must follow the “overlays” or guidelines regarding borrower finances set by their respective banks. This can make it difficult for them to offer mortgages to those who have unique financial circumstances, require specific types of loan aid (such as FHA or VA), or individuals whose credit is still maturing.

Flexibility

Unlike banks, brokers are able to select whichever lenders they prefer and collaborate with them to create a loan that meets the requirements of their client. Wholesale lenders who work with brokers don’t need to conform to Overlays—they can approve loans according to the borrower’s individual needs.As a result, brokers are equipped to offer their clients a broad selection of loan options with varying advantages that they can customize according to the individual’s needs.

Licensing

Bankers and brokers are both required to obtain licenses to carry out their operations. A bankers license permits them to gain registration in all 50 states, while a broker has to apply for separate credentials in each state they intend on operating. A broker must complete extensive training regarding that particular state’s mortgage laws and regulations; this means that if a single broker registers with multiple states they have an immense amount of knowledge regarding each individual regions’ proceedings and can give borrowers access to valuable insight which can be utilized when choosing specific packages or services

Brokers must take the federally mandated SAFE test in order to be certified. This exam tests for an extensive understanding of mortgage related topics such as process, laws, consumer protections, fair lending and more. Brokers must be knowledgeable on these matters whereas bankers do not face the same requirements.

For those who are seeking a sure-fire way to navigate the mortgage process, brokers offer the advantage of their refined education and advanced understanding of state processes. Working with an expert broker ensures that all paperwork is filed properly from start to finish – giving you peace of mind during such an important process.

Compensation

Brokers are generally compensated by the lender once the closing is finished. In some cases, they may be paid by the borrower, and their fee will then be included in all of the closing costs. All brokers need to ensure that their rates for borrowers stay uniform; furthermore, there are certain limitations on how much a broker can make from any given home loan – no more than 3% of its value. It is important to note that each broker must disclose this compensation beforehand so that they cannot modify it after verbal agreement has been made.

Banks pay their bankers, and hence borrowers have no idea about the exact amount of closing cost that would be invested in their home versus the banker’s pocket. This process lacks the same transparency that brokers offer.

Availability

One of the key variations between bankers and brokers is their devotion to you, the borrower. Keep in mind that a banker functions for their bank while a broker works on behalf of you – their client. This means your broker will be available when it matters most: they’ll give out contact information such as email address or cell phone number so that any queries or problems can be discussed directly with them whenever necessary.

Bankers are restricted to working during regular business hours and have the capacity of managing multiple borrowers at a time. The volume model dictates that there is only so much time available for each borrower, thus limiting the amount of attention a single borrower can receive.

Things To Remember

When you’re searching for a mortgage, brokers and bankers can both get the job done – however their approaches differ.

When compared to bankers, brokers offer:

• Specialized advice and expertise
• Greater ease of communication
• A more nuanced understanding of the mortgage industry
• The ability to simplify and expedite the process for their clients
• Answer any questions and address any concerns the client may have
• More options to the consumer, by enabling them to shop the market for the best price
• Accountability and competition among their providers

Don’t compromise on your goals, especially when it comes to your dream home. Call (770) 757-5750 or complete our online form to speak with an experienced mortgage broker at Sword Mortgage today and find out why our team is truly the best choice for you.