Banks vs. Mortgage Brokers
March 8, 2019
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The renting market lately has left something to be desired and even though that is the case, you’ve finally made the life changing decision to buy your own home — congratulations! Whether you are in need of extra space for a growing family or are buying an investment space, don’t rush into it! Take a breath, this is a big step so don’t go running to your nearest bank and make an appointment just yet. You could be setting yourself up for a bad deal. Take a second to think about all the options that are out there.
It’s usually the case with many first time potential home owners that they feel comfortable getting a mortgage from their personal bank, or more recklessly a loan institution. On the surface that may seem like a desirable idea but one should ask themselves if their personal institution really has their finances at heart? Are they getting you the best rate possible?
We want to clear up some concerns you may have about Mortgage brokers and Banks. We’ve made a list that highlights the benefits and drawbacks between these two institutions so you can have better insight into home buying.
Bank Benefits
- Relationships: You and your bank have a years of history banking together. This is of course assuming you have good standing with your bank.
- Possible lower interest rates: It is a possibility that because of your years of banking and good relationship that your bank might offer your lower interest rates and further financial gratuities. This of course is a possibility and should not be considered while making an institutional selection.
- Ease of service: Getting your Mortgage payments set up is made way simpler. The bank already has your information and can simply transfer the information from one account to another.
Bank Drawbacks
- Fewer options: Your bank will most likely be able to give you a static set of loan options.
- Paperwork: The bank will have lots of paperwork to go through with you for their protection as loaners and will take up more of your time.
- Knowledge: Your loan agent may not proficiently understand the home or mortgage buying process.
The information above about the banks may not include numbers and rates, but it gives you a glimpse at how important these small issues matter. Let’s take a look at the Mortgage Broker side of things.
Mortgage Broker Benefits
- Single Contact: You will not need to set up or attend any meetings. Your Mortgage Broker will speak on your behalf with companies and relay all the information to you.
- Flexibility: Mortgage Brokers are more flexible than Banks and because of this there is a chance they may be able to offer better rates and more customization for your home-buying plan.
- Waived Closing Fees: More often than not, Mortgage Brokers are able to get Closing rates waived. This is significate as it can save you money when you finally sign on and purchase your home.
Mortgage Broker Drawbacks
- Availability: Mortgage brokers may not offer programs that banks offer. Banks may provide interesting plans but with high rates. Mortgage Brokers will most likely not be able to match those banking plans.
- Bank Fees: Mortgage Brokers may still have to pay the banking fees associated with mortgages. These prices can vary wildly.
As you can see the different types if services provided by banks and Mortgages brokers can vary and a decision should not be taken likely. Take a moment to consider which institution is best for you and good luck!
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