When it comes to choosing a lender, you need all the facts. Below I will explain the difference between a lender and a broker and the pros and cons of each. This will help you in making your choice.
Deciding the company to use is an important process for anyone buying a house.
With so many lenders to choose from, you want to be sure and select the right one.
a mortgage company, especially the right company, can mean the
difference between a happy experience or a bad experience.
So when you start looking around for a home loan, you have two choices in companies, they are basically a:
Now let's go into the difference between these two types of suppliers.
You can choose to work directly with a lender. If you do this, lenders are loaning out their own money. Normally they have their own in-house underwriters and loan programs.
Banks usually fall under this category. They have a department that specializes in home loans and will have staff to help you. They are not a broker but a place that helps connect borrowers like you with the lenders.
Personally I feel this is the best way. Why is that? You are cutting out the middle man. This saves you money because the broker has fees associated with working with them.
The other choice you have is to work with a mortgage broker. The advantage of choosing a broker is this: they have access to many direct lenders. This can be to your advantage.
Mortgage brokers have many loan programs from a variety of different lenders to offer you. However, I think you will pay more in closing costs going this route.
If you have any special needs a mortgage broker may be your best choice. If the mortgage broker is professional, he/she will know the many different loan programs and be able to match you up with the lender quickly.
Also, you want to shop for the best interest rate, closing costs, prepayment penalties and the loan terms. Make sure they are giving you their best deal.
Keep in mind, you’re the customer. So as you’re looking around, be sure to ask lot’s of questions. Get to know the person you’re going to be working with.
Do they care about you? Do they take the time to explain unfamiliar terms to you? These are things you want to know about the loan officer you're going to be working with.
For more information on selecting a mortgage company along with other valuable information, request our FREE 14pg Guide.
FHA Home Loans is a good place to go to understand the FHA loan programs and why they are the best for first time home buyers.
Home Buyer Programs educates you on the different programs to choose from.
Go to House Buyer Solutions Home Page.
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