The difference between mortgage brokers and bank loan officers
For many people around the world, a house is the largest asset they will ever own, so the decision to buy one can be truly daunting. Getting a mortgage involves responsibility and can become a burden if handled incorrectly or if all aspects are not considered.
There are statistics that show that approximately 50% of mortgage seekers settle for the first loan offered by their own financial institution without further research or interest in the subject. Very often, people do not request more information about other possible loans, but instead agree to any type of mortgage offered without realizing the possible consequences of their actions.
In terms of counseling services offered to homebuyers who decide to get a mortgage loan, there are two types of professionals available, which are bank loan officers and independent loan officers (most commonly mortgage brokers).
A loan officer at a bank or other financial institution is usually the nice person who represents the services of the institution, and their job is to take the application that the customer has submitted and then pass it on to other departments of the institution. Also called “mortgage loan originators,” bank loan officers can recommend the right type of application because they specialize in commercial, consumer and mortgage loans.
On the other hand, a mortgage broker usually offers a wider variety of services, including advising the client on the best loans available on the market (without stopping at one financial institution), communicating directly with the underwriter and collecting and evaluating the necessary documentation for the loan approval process.
Many people prefer to go through the traditional procedures, which include going to their personal bank and dealing with the bank’s loan officer, without taking any other route.
What happens then if you decide to use a mortgage broker?
First of all, there is a general misconception about additional fees that come along with the services of a mortgage broker, which causes people to avoid considering the option in light of the already huge costs that await them with the mortgage loan. But in reality, the help that mortgage brokers offer won’t cost much more (if at all) than that obtained through a big bank, because mortgage brokers rely on the commissions they receive on the value of the mortgage loan, which can range from 0, 5% to 1.5% in some situations.
What’s more, the overall cost of using a mortgage broker can actually be lower because mortgage brokers have many loan sources to choose from, compared to a bank that will only have a limited number of loan products to choose from. suggested, because while loan officers who work to sell mortgages issued by their employer have a fairly wide choice of credit products to offer, those originating from a financial institution, which in many ways makes them much more -limited than in the case of mortgage brokers, who will have available many types of loans from different financial institutions.
The difference between bank loan officers and mortgage brokers is undeniable, but although it seems that mortgage brokers will offer a greater variety of options at a generally lower cost, it cannot be ignored that a large number of homebuyers prefer convenience over familiar loan officers of their own bank give them such a big decision that will affect their entire lives.
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