To buy a house, most people know they’ll need a mortgage. And many just assume that their current bank is the best lending option.
But not so fast — there are thousands of lenders out there who may have better rates and deals for you. But how do you sort through them all?
That’s where mortgage brokers come in. Brokers comb through all the available options out there to find the mortgage that works best for you and your financial situation.
It may sound confusing, so we’ll break down the definitions and key differences between a mortgage lender and a mortgage broker.
MORTGAGE LENDER
These are your banks, credit unions, and other mortgage companies that are primarily focused on lending money to people for mortgages. As a financial institution, they underwrite mortgages and set the guidelines and parameters for who is qualified to borrow from them.
The lenders have the money they let you borrow so you can purchase property. They make their money by charging interest on the mortgage.
While each lender can offer multiple types of loans, if you choose to stick with one lender, you may miss out on other mortgages with better rates for you.
MORTGAGE BROKER
A broker, on the other hand, doesn’t lend out the money for a mortgage. They’re kind of like personal shoppers for a mortgage. You hire a mortgage broker to do all the legwork of researching loans and putting together applications for you. A broker can also help you identify areas to improve your chances of getting a great loan.
Brokers are not tied to specific financial institutions. They can check out as many as they like until they find the perfect loan for you. However, some brokerages may have relationships with lenders that they may persuade clients to use.
With a mortgage broker, you don’t have to go through the trouble of applying to multiple financial institutions in a short period of time. A broker can also help you navigate tricky loan applications, provide tips to boost your chances of getting a mortgage, and be a great resource throughout the homebuying process.
Being a broker is better.
The biggest overstatement of the century? “Buying a house is stressful.” Because it is! Even quick, straightforward transactions can send the most anchored adult into a tailspin.
Working with a broker such as AMKO can remove a significant amount of stress from the homebuying equation. We’re not tied to any particular lenders, and we work diligently to find the perfect mortgage for you.
Let us help remove the strain and stress of finding a mortgage. We’re here to help!
