Making sense of the home loan market can be challenging. With so many lenders to choose from, it can be hard for you to source the best deal. While a mortgage broker can help you sift through all the lenders in the marketplace, there are distinct advantages to going directly to a lender.

So which option is the best for you?

What do mortgage brokers do?

A mortgage broker is responsible for assessing your situation as well as your creditworthiness. This will help him develop an objective picture of your chances of qualifying for a home loan. His assessment also typically covers your income levels and ability to shoulder mortgage repayments.  

Aside from assessing your situation, a mortgage broker will take your info and work to find a loan that meets your needs as closely as possible. Most brokers have access to databases of info on available lenders, enabling them to match their clients’ needs to the best lenders quickly and efficiently.  

Just as importantly, mortgage brokers will provide valuable advice throughout the entire application process, which helps ensure that you make the right decisions.  

The advantages of using a mortgage broker

Mortgage brokers possess a strong understanding of the policies of 20 to 30 different lenders. By going to a reputable mortgage broker, clients won’t have to go to multiple banks to source the best home loan products.

Additionally, mortgage brokers aren’t aligned exclusively with one bank. They work more like agents for their clients, and don’t represent the interests of the banks.

The disadvantages of using a mortgage broker

There are some disadvantages to using a mortgage broker. Due to the sheer number of brokers in the marketplace, it can be difficult to pinpoint the brokers who’re highly experienced and can provide top-notch services.

A great way to overcome this deficiency is to ask family, friends, and colleagues to recommend good mortgage brokers they’ve previously worked with.

“It is also important to do a bit of basic research, like see how long the business has been established, do they have a shopfront or office, etc.,” said Cliff Ferrer, a broker at 1st Street Home Loan Specialists. “Clients should get some confidence that they are dealing with a broker who is established and won’t be here today and gone tomorrow.”

What do bank loan officers do?

Bank loan officers generally act in similar ways to mortgage brokers. The major difference is that bank loan officers work for a specific bank or lender. They’re considered employees of the bank or lender they work for, and often receive volume incentives when providing clients with loans.

If you possess great credit, are already a customer of that bank, and have a stable income, you’re more likely to get a good rate with that bank. A reputable loan officer can match you to the best loan product available with that specific bank.

The advantages of using a bank loan officer

As was previously mentioned, bank loan officers can assist borrowers who have great credit at the time they seek out a loan. Banks prefer to work with clients who happen to be low lending risks, as these are the individuals they can make money from the most easily. Coursing your loan application through a bank loan officer can also give you access to the very best deals that the bank or lender is offering.

The disadvantages of using a bank loan officer

There are some limitations associated with sourcing your loan directly from a bank. A bank loan officer only has access to the loans being offered by their bank or lender. This can seriously restrict the options available to prospective borrowers who aren’t already direct customers of that bank or lender.

Conclusion: Review your credit situation and preferences

Since there are clear pros and cons to going with either a mortgage broker or a bank loan officer, you should carefully review your credit situation and preferences to decide which option is best for you. This way, you’ll end up with the best result possible for your situation.  
 

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