When it comes to purchasing a home, we’ve found that some of the most pressing questions from buyers are related to financing. How to choose a mortgage lender is near the top of the list. The truth is that while many home hunters automatically turn to their banks for help, there are other lending options available. One that’s becoming increasingly popular is using a mortgage broker—but how does it stack up against working with a traditional lender?

In this post, we’ll weigh the pros and cons of financing your home purchase with a bank vs. a broker…

Products & Services

One of the biggest differences between the two main types of mortgage professionals is what they offer. While a bank representative can usually only provide you with their own products and services, a broker works with multiple lenders. As a result, they can shop around for the best possible rates, terms, and conditions on your behalf.

Mortgage expertise

Another benefit of working with a broker is their mortgage specialization. If you are working with a bank make sure you are for a mortgage specialist, most banks have a person who specializes in mortgages and nothing else. Since this type of professional is devoted entirely to helping buyers obtain financing, they usually know the ins and outs of the process better than anyone else. Of course, that’s not always the case–some banks offer higher levels of mortgage expertise than others, as do some mortgage brokers.

The whole financial picture

Often, a preexisting relationship is reason enough for home hunters to stick with their banks. That’s understandable! An institution that knows your financial situation intimately is well-positioned to offer you borrowing advice. They’ll be able to present you with the full picture (and your options) quickly and easily.

The process

Loan processing and underwriting can take time. From the borrower’s perspective, the road to approval is often accompanied by various requests for information from lenders—many of which come at the last minute. For those who opt to work with their banks, the process is often smoother (since there’s less leg work required). An experienced mortgage broker will also have the knowledge to keep the process moving forward in a timely manner.

Peace of mind

Last but not least, you might want to consider which option will provide greater peace of mind. With its deep-rooted stability and well-established processes, your bank may offer you a stronger sense of security. On the flip side, some buyers feel more relaxed knowing that a broker is out there comparison shopping for them. Many mortgage brokers also work with banks.

In addition to mortgage brokers and banks, there are other borrowing options available (such as credit unions). The one that’s right for you will depend on your goals, preferences, and priorities. Fortunately, an experienced local agent should be able to provide some good basic information on the choices available to you—along with helpful referrals!

Ready to start the home-buying process? Get in touch to learn how we can help at every step!