Pros and Cons of Using Mortgage Bankers and Brokers
About ten years ago there was a housing bubble market crisis that impacted the rules and regulations involving mortgage loans. The mortgage brokers were the people to go to anytime you needed alone. Since the mortgage brokers belt in shady dealings, it impacted the industry since it only developed a bad reputation.
Nowadays the small security for the borrowers since the restrictions were tightened for brokers by the SAFE Mortgage Licensing Act of 2008. Borrowers will have to take higher loans when the broker takes premiums but that was stopped since they need to pass the licensing exams. You have to understand the benefits of taking a mortgage loan from a bank or a broker and research to know which one is good for you.
A mortgage broker is usually a middleman who works with the client and the bank so the shop around for the best mortgage loan. The mortgage broker works with different lenders and negotiate on the borrower’s behalf, so they will work with the realtor to close the deal. It will be easy for the mortgage broker to shop for the best loans once they get information from your paperwork like income statements and credit reports.
Borrower and lender can end up paying the 1-2.5% commission the broker is asking for since this is how the broker makes their money. Working with a reputable mortgage broker is necessarily since they can find the best clothes for you plus you should get references to know the type of clients they worked for. Qualifying for a mortgage loan will depend on the information the mortgage banker received since the work in an institution that gives out the loans.
The mortgage banker works directly for the bank and give the final say when it comes to approving the loan. The mortgage bankers get a salary from the institution and different bonuses and incentives if they perform well in their job. Working with a broker means you get a variety since they are not required to work with only one lender, so you get different loans.
The broker will get you loans from financial institutions that have less strict on the qualification requirements. If you want to get a mortgage loan in a short time then you should hire mortgage bankers and can sign the documents needed to go to the next step.