When you shop for a home loan with a bank, you’re doing the legwork of figuring out whether that bank is right for you. So chances are, you’ll find yourself setting up a spreadsheet or at least making a list to keep track of rates, fees and other considerations.
A mortgage broker serves as an intermediary between you and direct lenders, which include banks. After discussing your needs, mortgage brokers take care of the rest. They reach out to their contacts at direct lenders and come back to you with options that fit your criteria. The broker then works with you to figure out which loan best suits your circumstances and continues to facilitate the transaction through the closing.
Pros of using a mortgage broker:
There are several advantages to using a mortgage broker versus a bank. Doing the research and finding a mortgage lender on your own can match some of the benefits of working with a broker, but a mortgage broker may have access to more resources.
- Help with prep. You can start working with a mortgage broker reasonably early in the homebuying process. In addition to answering your questions about getting a home loan, a mortgage broker can help you go about gathering all the documents and information you’ll need to apply for a mortgage.
- Access to various loans. A bank’s loan officer can only present you with home loan products the bank offers. A mortgage broker, on the other hand, can help you obtain any home loan. If you’re looking for a type of mortgage that’s less common, working with a broker can give you a shortcut straight to the relevant lenders.
- Customized assistance. Suppose you’re someone who might not qualify for a home loan, or you have circumstances that require more explanation (for example, gaps in employment or a thin credit file). In that case, a mortgage broker may be able to help you find lenders amenable to your situation. Even if you’re a borrower who wouldn’t have any trouble getting a mortgage, a broker will meet with you (in person or virtually), go over loan options, highlight points of comparison and support you in making an informed decision.
Convenience. Getting a mortgage is a time-intensive process. Even after doing all the due diligence to find the right bank for you, the actual application and loan closing process are intense, with lots of back-and-forth and requests for documents you swore you already provided twice. A mortgage broker will generally handle the paperwork and lender-wrangling on your behalf; a good mortgage broker will save you time and stress.