Brokers vs. Bankers
« Thread started on: Jan 14th, 2008, 2:37pm »
What’s the Difference Between a Banker and a Mortgage Broker?
The most common question I get from my clients is, " What's the difference between a Banker and a Broker?" The answer is simple, options, options, options!
A Bank or Credit Union will present you with only their rates loan programs. A Mortgage Broker has access to over 400 lenders nationwide, wholesale rates and a multitude of programs. Most Banks and Credit Unions operate between the hours 9am-6pm. Mortgage Brokers tend to have considerably more schedule flexibility and can meet with you at a place or time convenient for you. Brokers (or multi-lender platforms) represent a number of lenders and offer lenders’ products through a wholesale arrangement. So the broker can offer wholesale rates, as opposed to retail rates. The broker is compensated only when they deliver the loan to the lender and this compensation is invisible to the borrower. With many banks that have retail and wholesale divisions, such as Countrywide, Wells Fargo, Wachovia and Flagstar to name a few, a broker can frequently be more competitive than the retail side of the same bank. Multi-lender brokers on the Internet can be a very competitive source for mortgage loans available. However, be wary of multi-lender sites that limit their choice of lenders to less than 10 sources. Many such sites are charging the bank to participate and cannot offer unbiased selection, as they are obligated to their lending sources. Moreover, Internet lenders are notorious for poor customer service, which can result in considerable, and unnecessary, stress! Direct lenders can be obligated to their own products. They are paid to sell the “company” product and may not provide unbiased advice or selection.
Since brokers can sell a variety of products from multiple sources, they can be objective in their recommendations. The compensation provided from one lender is equal to that from another lender, therefore the outcome of the recommendation doesn't matter. If you walk into your local bank, they'll usually take your application there, perhaps underwrite your loan there, and lend their own money. If your loan is declined for whatever reason, you will need to begin the process again with another source. With a multi lender source, you have another chance if one lender doesn't approve your loan.
Bankers are compensated whether you take the loan or not. Brokers are compensated ONLY when the loan closes, and are quite motivated to make it work! To summarize, there are many ways to approach your home financing process beginning with the source that you choose to borrow from. Good Mortgage Brokers know that the best clients are educated clients and take the time to thoroughly discuss the process and provide ongoing financial counseling for their clients. They keep you informed throughout the process…all the way through settlement. When interviewing Mortgage Brokers, ask them if they personally attend the settlement!! And remember to work with a source that has established itself as a company with integrity that cares for the borrower throughout the experience. My commitment to you is to listen and pay attention to the details that guarantee a problem free experience... When all is said and done, results are what you count on with your mortgage and I'll provide the care and expertise to get the results you want!
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