Difference Between a Mortgage Lender and Mortgage Broker
Category : House
At the time of looking out for a mortgage, very often, one gets confused about whether to approach a mortgage lender or broker. In effect, both these individuals are professionals who aid and abet people in obtaining finances or for refinancing a mortgage loan. It is a fact that picking one over the other is actually a matter of choice. However, what experts opine is that it is best to opt for someone who is closer home to you, or rather is more local in their placement. In this manner, one is actually more familiar with the person concerned and also you can be at close call with him or her.
Then again, there is a general feeling of agreement about the poor efficiency in the whole system for obtaining a mortgage. Whether one is engaging a mortgage broker or a lender, the same hold true for both events.
However, there is a good deal of difference between mortgage brokers and mortgage lenders, so to say. For one, a mortgage broker always works in tandem with a good many number of lenders. This is so that they would be able to help you get the best possible deal for your loan. There is a good chance that a mortgage broker could help you get a good bet, even if you are in a segment which certain lenders stay clear of. These could be those involving lower credit scores, investment properties and even higher debt ones. However, mortgage lenders do not really go around hunting for bargains and discounts in their line of work. They are the LENDERS, in other words. If you are in keeping with their set of criteria for getting a loan, they will give it to you. Or else, you may have to go off looking around all over again.
It is also a rule that mortgage brokers need to give information about their fees, as per federal laws. However, mortgage lenders come under no such rule. Due to this, there can be a bit of foul play in the fee structure of mortgage lenders.
What is apparent is that a mortgage broker can utilize his or her time in doing things by themselves. On the other hand, a mortgage lender can have others in his or her company do the documentation work for them. This can lead to more of errors creeping into the whole format.
Brokers, as is the case, do not lend money. But, they have the capability to shop around on behalf of their clientele. Also, they are more like middlemen. Due to this, they have to send off loans for underwriting and closing on. Direct lender, on the flip side, are something like a one stop shop. They organize for all the processing, underwriting and closing functionalities within the company itself. Thus, to sum up, one can say that brokers put forth a wider range of options in front of the client for them to choose from. However, lenders have more of a say in the whole process right from starting to finishing times.