Using A Mortgage Broker To Get The Best Loan Possible
The two options commonly available to borrowers seeking to secure a home loan are working directly with a bank or mortgage company or acquiring a loan through a mortgage broker. Although many people choose the former, mortgage brokers offer their own set of advantages that are worth considering. If you are not familiar with brokers or with the differences between retail and wholesale loans, keep reading to discover if this particular path is right for you.
Retail vs. Wholesale Mortgages
As the name implies, retail mortgages are loans that are made direct to consumers. When you visit your bank or contact a major mortgage company to secure a loan, you are acquiring a retail loan. On the other hand, wholesale lenders deal with third-party brokers rather than providing their products directly to consumers. In some cases, these are the same lenders providing retail loans. In other cases, they are lenders that choose to work only with brokers rather than working directly with consumers.
Do You Need a Broker?
The simple answer is that you never need a broker to secure a mortgage. If you are willing to do the legwork of researching and applying for mortgages on your own, then a broker may not necessarily offer you any added value. Brokers can potentially make the process of choosing and securing a mortgage faster and more convenient, however.
The Advantages of Working with a Broker
Hiring a broker is all about bringing a professional into your mortgage application process who knows the ins and outs of the system. Brokers will often have established relationships with both major banks and smaller, local lenders. This means that a broker can help you select between lenders that are right for your particular situation, saving you the time you would otherwise spend applying to loans that will not be a fit for your needs.
Brokers also often have access to lenders that you will not as a consumer. While not all retail lenders are willing to worker with brokers, wholesale-only lenders never work directly with consumers. This allows brokers to provide you with a greater number of options, and most reputable brokers will still point you in the direction of a retail loan if they truly feel that it is the best option for you.
Additionally, some brokers specialize in poor credit or non-prime loans. These brokers will have access to wholesale options that are likely to be a better fit or more accessible for your particular situation. If you are finding that retail lenders are not offering you acceptable terms, a broker that specializes in credit situations like yours may be able to help.