By: Vincent Picone

Mortgage Broker vs. Bank - Which is Right for You?

Tags: real estate, mortgage, mortgage broker, big bank

For first-time homebuyers, the process of getting a mortgage can be daunting. As one of the biggest financial investments that one will undergo in their lifetime, mortgages are crucial to understand before taking the next steps to acquire one.
When it comes time to begin the process of applying for mortgages, there is a decision to be made on whether you will use a bank or visit a mortgage broker. There are pros and cons to both avenues, like anything, and the most important part is to do your research beforehand to know which option is best for you and your particular set of circumstances. If you’re unsure about which is best, a conversation with your realtor can help you to narrow down your choices and find an option that fits your needs, as many realtors will have banks, brokers, or lenders that they will recommend to homebuyers.
While banks can only offer loans from their own institution, mortgage brokers are able to shop around on your behalf and find the best rates from a wide array of lenders. Mortgage brokers will do the negotiating for you to ensure that you’re getting the best deal possible, while when it comes to acquiring a mortgage through big banks, the negotiations are up to you. Because bankers have to know the basics of many different aspects of financial planning, they may not be up to date on the newest information about mortgage borrowing at any given time. Mortgage brokers, however, specialize in mortgages and will have the most up to date information to provide you with.
It is also important to consider, however, that mortgage brokers are paid through commissions. Considering this, it is also possible that sometimes a mortgage broker is not providing you with the best rate overall, but simply the best rate from the lender that gives them the best commission payment. While bankers may not specialize in mortgage borrowing the same way that a broker does, banks have the ability to provide borrowers not just with information on their current financial situation, but also how their current decisions will affect their financial future and help them to plan accordingly.
There are pros and cons to both banks and mortgage brokers, and ultimately, the decision is yours to make. Do thorough research before making a decision, and be sure to check references for any mortgage broker or bank before opting to work with anybody.
If you want to read more about the different things that banks and mortgage brokers can offer you, check out some of these articles:
Bank vs. Mortgage Broker
Mortgage Seekers Wonder: Broker or Bank?
Mortgage Broker or Big Bank – Who to Choose? 
Mortgage Brokers vs. Banks 
Mortgage Options – Bank versus Broker