Every day brings new choices—and every mortgage does as well. This is a good thing; no one can force you to enter into a long financial contract that doesn’t suit you.
You’ll have many choices along the way, from the length of the mortgage term to the amount of down payment, but the very first choice you’ll likely make is whether to go with a mortgage lender vs. a broker.
Understanding what each does, and how his or her role differs, can help make this choice easier.
Lender vs. Broker: What’s the Difference?
A mortgage broker is essentially the middleman between you and a mortgage lender, facilitating and securing a wholesale loan for you. A loan officer, on the other hands, works DIRECTLY as the lender’s agent with no middle man.
Both mortgage brokers and mortgage lenders only handles mortgages (and mortgage-related transactions), while a bank officer handles many various services, from investment accounts through auto loans, and much more.
Why Go With a Loan Officer Over an Independent Broker?
- Seniority: A mortgage loan officer often brings seniority and experience to the table, and is adhering to additional standards over and above the minimum required by law. An independent mortgage broker might meet you in his car and evaporate after the loan closes.
- Reputation: A mortgage loan officer is supporting the reputation of the lender’s BRAND, which is often a bigger deal than upholding a personal brand. It boils down not just to trust, but understanding that lenders can’t afford to associate their brand with anything but reliability.
- Processes: A mortgage loan officer has a set of processes where others are often ensuring you get the best loan, with all the correct i’s dotted and t’s crossed. Sophistication of processes means not working out of a file box, but correct record keeping. That can mean the difference if anything goes wrong.