Mortgage Broker vs Loan Office at local bank

Buying & Selling Real Estate
10yFollow

Mortgage Broker vs Loan Office at local bank

Susan Herschell
Rental Property Investor · West Linn, OR · Member since 2016 · 30 posts · 11 votes

I am hoping to start a relationship with a mortgage professional and not sure whether its best to just work direct with a loan officer at my local bank or to go through a mortgage broker. What have been some of your experiences? What would you describe as the pros and cons of each? 

0Reply
18 views

3 Replies

Jump to latestLatest
  • Renee Huffaker
    Investor · Bixby, OK · Member since 2016 · 14 posts · 8 votes
    10y

    I suggest starting with your local bank.  Here are a couple of reasons:

    • Your local bank will likely offer a wider product selection than a mortgage broker.  Mortgage brokers typically only offer loans that conform to secondary market standards.  Conversely, your local bank may offer you the same types of secondary market products, but will also have an array of in-house products that can provide a wider range of flexibility on both terms and pricing.
    • Fees will often be higher with mortgage brokers.  Mortgage brokers have to get paid.  Most get paid by the lender who originates the loan; however, you can be assured the cost of that fee will be built-in to the price you pay either in a slightly higher interest cost or some type of origination fee.
    • Other items to consider:  There is no downside to shopping around with multiple lenders.  It won't hurt your credit score (as long as you shop within a 30 day time period) and you can typically save a lot of money by spending some time comparing costs between more than one lender.

    Hope this helps!

    0Reply
  • Susan Herschell
    OP
    Rental Property Investor · West Linn, OR · Member since 2016 · 30 posts · 11 votes
    10y

    Thanks Rennee! This is great advice.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y

    Im actually on the opposite end of the spectrum than @Renee Huffaker. I recommend going with a mortgage broker. A mortgage broker will be able to shop amongst many lenders for you. Many banks have internal underwriting guidelines that limit you to 4 mortgages, but if you are going through a broker you never have to worry about the internal guidelines as they are shopping amongst 30 or so different lenders. Yes the mortgage broker takes a cut of the pie....but typically the rates and loan products they are originating are being done at a larger discount than you could get, so their fees are outweighed by the discount you get using them.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    2Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free