The first step to buying a house is getting pre-qualified for a mortgage loan. Even if this isn’t your first foray into purchasing real estate, it can be a confusing and frustrating process.
One of the most common sources of confusion is whether to choose a bank or a mortgage broker for your home loan needs.
Before you make a decision that will affect your entire financial future, it’s critical that you understand the difference between these terms and how your choice will affect the outcome of your loan.
What Is a Mortgage Banker?
Visit the nearest branch of your local bank or credit union, and you’ll see people sitting at desks off in the distance, away from the teller line. These bank employees assist customers with various products offered by the bank, such as car loans and home mortgages.
At the bank, you will have limited options to choose from for your home loan needs. Typically, qualifying for a mortgage at a bank is more difficult, requiring a higher credit score and income level. If you do qualify, you might get some perks in return, like free checking or reduced loan closing fees.
Before you decide to seek a home loan from your bank, however, it makes sense to explore the alternatives.
What Is a Mortgage Broker?
Mortgage brokers specialize in one thing and one thing only – helping you find the best home loan program for your needs. Brokers represent multiple lending institutions, allowing them to shop around to find the best deals that are currently available.
Mortgage brokers also have greater flexibility for borrowers with lower credit scores and higher debt-to-income ratios. When you work with a local mortgage company, you can choose from conventional loans, government-backed loans like FHA, VA and USDA mortgages. Your loan officer can assist you with no-cost and zero-down loans, mortgage refinances, home equity loans, construction and renovation loans and more.
Choosing the Best Mortgage Company for You
Buying a home is one of the most important financial transactions of your life, and one that will impact you economically for years or even decades. Choosing the right mortgage company for you is critical for achieving your goals of home ownership and financial stability.
Look for a lender who offers a highly personalized level of service. You need a loan officer who will answer your questions and provide the information you need to make informed decisions about your mortgage. A mortgage lender in your community will understand your area and have access to any local grants and other loan programs that can make buying a house easier and more affordable.
To get a better idea of what you might expect your monthly house payments to be, you can experiment with a mortgage calculator, such as the helpful interface at www.integritylending.com/. But, before you make any decisions or start looking for a house to purchase, take the time to talk to an experienced mortgage broker and obtain a pre-qualification. That way, once you’re ready to select your new home, you’ll be confident in your status as a qualified borrower.