What the Banks Don't Want You to Know!
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Mortgage
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Before you choose a mortgage loan officer
or broker, you should read through this article to gain
insight into the secret world of mortgage lending. There's a
difference between mortgage brokers and loan officers, and
the banks want to keep secrets from you.
The first thing to understand is that
there are different types of loan consultants. You have loan
officers that work for banks, mortgage lending officers that
work for mortgage lending companies, and you have
independent mortgage brokers, such as us, who don't work for
any one funding source, but rather shop loans to all lending
sources via their wholesale departments. So, what does this
mean to you?
A banker or mortgage lender works for the
company providing the funds (i.e Bank). That means they only
offer that lending company's programs. Whether it's the
right program for you or not, they are going to sell you
what they have. A mortgage broker, on the other hand,
doesn't work for a funding source. They broker loans between
the borrower and the lending company. So, essentially, a
mortgage broker shops your loan for you to many different
lenders. A mortgage broker has more loan program options,
can get lenders to compete for your loan, and in the end,
find you a better deal. A mortgage broker can shop your loan
for you better than you can shop it yourself.
A banker or mortgage lender works at the
retail level, offering the limited loan programs they have
available at the rates they are forced to work with. This
limited approach doesn't provide you with the best options.
When working through a bank or lending company, in order to
shop around for a better program, you need to provide your
information to each lender, and have a credit report run
each time. A mortgage broker only needs to take your
information once. Armed with that information, the mortgage
broker presents your loan scenario in the best light
possible to many lenders, looking for the BEST deal for you.
A banker or mortgage lender will sometimes
offer low lending fees up front, maybe even free checking
account services, luring you in, but almost always have a
higher rate, charge points, or mortgage insurance (which
only protects the lender in case you default on your loan).
How else do you think they'll make their money? Banks will
make their money, we all know how they operate. Again, banks
work at retail. A mortgage broker, even though he/she may
also secure loans from banks and lenders, is working with
the wholesale departments of those lending institutions, so
mortgage brokers can provide lower rates and payments than
banks and other retail lenders.
Banks have a big, well-known name and they
are the first places we think of when we need a loan, but
with limited program options and higher rates, they are not
necessarily your best option - especially when their credit
standards are so strict. A mortgage broker can find a loan
program for almost anyone for almost any situation, no
matter how unique. They specialize in finding financing
solutions. Banks tend to be more rigid and by the book, and
don't offer the creative solutions needed to help most
Americans secure mortgage financing.
And, in the mortgage broker side of
things, there are good guys and there are bad guys. Talking
with a mortgage broker will reveal a lot about their
character. Are they spending their time selling you or
sincerely working with you on what you need in a loan? Are
they advising in your best interest or theirs? Are they
honest? This is a business about trust, and they should earn
yours before you do business with them.
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