Should You Choose a Mortgage Broker or a Major Bank When You Buy a Home?

Written by: Arron J. Staff writer @ Hyggehous.com

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As you're navigating where to go for a mortgage, you will encounter many different options including who to get your mortgage through.

You can choose from either a mortgage broker or secure a mortgage through a bank, but first, let's explore the differences between the two to figure out which one can give you the best rates. It helps to learn what a Mortgage Broker is, and what they do. First off, a mortgage broker is a professional freelancing agent who works between you and the lender; they are then paid a commission from the lender for getting them a good borrower. Shop Tiny Homes They basically compare the rates from a bunch of different lenders to find you the best deal, so they themselves are not lenders, but the way you can find the best mortgage rate for you. So they can even work with you and the big banks to find a mortgage. They start out by finding out what type of mortgage you could be approved for, sending in applications for loans and talking with you about the different mortgage types. People who have gone through a mortgage broker to secure a mortgage often said that they preferred going through the broker because they found them the best rate possible, sometimes even if their credit scores were bad.

There are even online mortgage brokers who make it possible for borrowers to look through the best rates in the country.

That way you don't have anyone pressuring you on what you should get, and you can take your time to assess the different options. Having everything online makes it easier for the customer and more affordable too because they don't have a lot of overhead to operate a business in an office. On the other hand, you can go through the Big Banks where you'll sit down with a loan officer who will guide you through some of the different loans and all of the terminology involved. Like the broker, they will also assess your situation and point out which loans they think will best suit you based on the information you've told them. They will usually even negotiate with you so just keep in mind that the rate they post is usually not their best rate. So by going with the mortgage broker, you can see them on your spare time, whenever you have a moment, whereas, with the loan officer, you'll have to book off time from work to go in and talk with them and maybe have to drive a distance to see them in person.

With the big banks, you can sort of work out a deal to bundle all of your business in one place which could come with perks like free banking or a safety deposit box since you'll be bringing a lot of your business to them.

With a big bank, it's easy to work in a Home Equity Line of Credit (HELOC) into your mortgage plan. On the other hand, you can get a higher interest rate doing it this way, and you can only negotiate with one bank which means you don't have the leverage since you won't know what anyone else is offering. So you have to choose which option works best for you and go with whatever feels most comfortable to you. If you are familiar with the online world and have an easy time navigating it, then going with an online mortgage broker would probably be a great idea for you. But if you're more interested in doing things the good old fashioned way in person and developing a relationship face to face, then sticking with a big bank will probably suit you better. You can always have a peek at what the online brokers are offering just to see.