Bank or Broker

2 Replies

I am looking to get into real estate investing and have been pre-approved by a mortgage broker, I was wondering if anyone could enlighten me on whether if its best to go through a broker or if i should get pre-approved from a bank as well? 

So there are actually two things at play here: licencing (of the person you are working with), and the source of funding (who is making the "yes/no" decision to wire your money?).

  • I am licensed to broker mortgages, which most retail bank loan officers are not. As such, people call me a mortgage broker all the time, and I do indeed broker mortgages when it makes sense, even though my business card says "loan officer" on it.
  • I happen to be employed by a mortgage bank (a bank that does exactly one thing and one thing only - mortgages). When I direct-lend, which I generally do for complicated REI situations where I 100% need to be in control and in communication with key people, I'm doing basically what a retail bank loan officer does (with the control and ability to talk directly to the underwriter who shares management with me if there's a disagreement, etc).
  • But when folks talk, it's clear they often are assuming that because I'm licensed to broker, it's a brokered mortgage. 
  • This is typical of companies that only do mortgages, and have words like "funding" or "lending" or "mortgage" right in the company name. 

I'll let the others who are more objective tell you about pros and cons, that was just a note on semantics.

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