Mortgage lenders and bankers are the two most common options when deciding where to get mortgage loans. And they differ in key points, hence you must know those differences before making a choice. Note that whichever you choose, it can either make or break your loan in the long run. So, be sure to choose one that would help you buy a home with least financial hassles.
Differences of Mortgage Lenders and Bankers in getting Mortgage Loans
In a nutshell, a mortgage lender focuses more on providing loans specifically for home mortgage purposes, while banks are financial entities which include mortgage lending in their services. That said, lenders usually have better rules in handling mortgage loans, while bankers impose strict regulations.
But that’s not saying lenders are better than banks all the time. Bankers also have their fair share of pros and cons—much like how lenders do. And you must know those point before coming up with a final choice.
Pros and Cons of Banks in Mortgage Lending
- Being a banking customer to a bank before you get mortgage loan proves to be valuable. That would possibly allow you enjoy better mortgage deals, such as bigger loans and lower interest rates among other benefits. Of course, that still depends on your financial history and credit score.
- You can enjoy specific types of mortgage loans and proprietary as well.
- Even after closing, the bank may still service your loan.
- Banks implement stricter regulations because they have to follow federal banking laws.
- They offer limited mortgage products, and usually complements it with other banking services. That means more fees to worry.
- They don’t possess flexibility and expertise of mortgage lenders in dealing specifically with house loans. For example, they usually take longer time in closing loans. After all, mortgage lending is just another service they offer, aside from main banking operations.
Pros and Cons of Mortgage Lenders in Mortgage Lending
- A mortgage lender has better expertise in handling mortgage loans because that’s what their service is all about. So, expect smoother transactions and more flexible deals.
- They offer more mortgage loan products for you to choose from. Pick one that suits you best.
- They’re more open for negotiations especially on terms and interest rates. So, you can pick an ideal loan for you, then there’s a good chance that the lender would shape it even further.
- Many lenders don’t have physical office locations. They often operate only through online means.
- Some lenders sell mortgage loans to other entities after closing. Be sure to talk with your lender about this concern.
- Lenders have good grasp over mortgage loans, so some of them tend to put customers on unobvious disadvantage. For example, some may lure you to higher interest rates without you knowing it. That’s why you must have enough information about mortgage loans before approaching a lender. Talking with your real estate agent is a good move.
You see? Both lenders and bankers have their pros and cons in providing mortgage loans. You only have to choose which one suits you best. Be sure, however, to find reputable bankers or mortgage lenders where you can get a loan. Consider other lending options aside from these two as well.
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