Mortgage 411 Center

Potential borrowers often wonder where they should go when shopping for a mortgage. If they are buying a home should they go with their Realtor’s mortgage person? Should they visit their local bank? Call one of those large national mortgage companies who advertise on TV? What about a mortgage broker? There are a lot of choices out there and consumers are often unsure which road to take.

All of these options can work but they each have their own advantages and disadvantages. Let’s take a look at them more closely:

1) Your Realtor’s mortgage person/company. Some real estate agencies have in-house lenders. Others have relationships with local mortgage people in the area, or your agent may have someone he or she recommends. Some buyers think this is the best choice because their agent can be involved in the transaction and ensure that it gets done. After all the loan officer is not going to want the angry real estate agent knocking on his office door every day demanding to know the status of your loan. This may work if you know your agent well, and trust him or her to make sure you are getting into the best loan for you, and not any program that will qualify you just to get the deal to go to closing so the agent and his mortgage friend can get paid. Also, steer clear of anyone who tells you that you have to use the in-house lender or local mortgage partner. They are clearly only looking out for one person and it’s not you!

2) Your local bank. You may very well get the best deal at the local bank as they sometimes offer some of the lowest rates, that is if you have perfect credit, can document your income and have the necessary money for down payment and closing costs. This is a very small number of borrowers and may not be you. Local banks also have some great programs for first time buyers that you probably can’t get elsewhere. However, don’t think that they will approve you just because you are a long time customer, know all the employees, never bounced a check etc. Unless you meet their strict criteria they probably won’t.

3) National mortgage companies you see on TV. You may think that this is the safest choice. How can you go wrong with a company that has ads running during the Super Bowl, right? Wrong. In the past years these types of companies have proven to be some of the worst choices for potential borrowers, charging high fees and rates, putting people in loans they could not afford and causing people to lose their homes. Many of these companies are now out of business, and some well on their way. Not to mention these companies are huge and get thousands of calls a day, so you can forget personal service and having someone to answer your questions about all the fees and charges that you don’t understand. In fairness, not all national mortgage companies are bad, and there are probably a lot of hard working mortgage professionals employed by these companies who will work to get you the best deal. The problem lies in weeding out the good from the bad.

4) Mortgage Brokers. A mortgage broker does not work for anyone bank or lending institution. A good broker will have access to a variety of different lenders and programs, even those for borrowers with less than perfect credit. You will have more options for financing with a broker than a local bank and most likely even the large mortgage company so there will be no need to shop around. If you do not meet the criteria of one lender, you may certainly be able to qualify for a loan at another.

Also a good broker will be able to offer you personalized service and work to get you the best possible rates for you because unlike the real estate agency’s in-house lender (who is basically handed clients by all the company’s agents) the mortgage broker will actually have to earn your business and work to keep it. There are a few brokers that are dishonest, and care more about their commission than they do their clients. But the majority (and those who wanted to remain in business) are not and know that if they do not find the best loan for the buyer the bank or lender down the street will.

Whoever you choose for your mortgage needs it is most important that you find someone you can TRUST. Don’t be afraid to shop around, and ask questions before applying for the loan. And if you are currently working with someone who is not returning your calls, answering your emails, or helping you understand your options, don’t be afraid to take the exit off of that road and go elsewhere.