Shopping for a home loan right after your offer on a home is accepted is like running two marathons at the same time. Not only do you have to worry about moving, appraisals, inspections, and packing, you are suddenly in need of a major financial product in short order. One question that comes up is which mortgage company you should choose? Should I use my bank, a mortgage broker or an independent mortgage lender? Here are a few tips on how to decide:
Mortgage Lenders vs. Mortgage Brokers
The difference between mortgage lenders and mortgage brokers is quite simple. Mortgage lenders lend you their own money to finance your home loan. Mortgage lenders are usually either a depository bank where you might have a checking account, Bank of America or Wells Fargo for example or an independent mortgage lender like Quicken Loans.
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Mortgage Brokers, however, are independent companies that work with many different larger lenders to find you the financing for your home. Mortgage brokers are typically smaller local businesses and work more like an independent insurance agency would, providing rates from multiple carriers.
Should I Choose a Mortgage Lender or Mortgage Broker?
The two most important factors in selecting your home loan financing company are getting the right loan type and the lowest price. For now, let’s talk Mortgage Rates and fees. Mortgage lenders charge consumers in two different ways, a combination of interest rates and fees. Obviously, you want to find the lowest rate and fee combination but how do you measure the best deal? APR or annual percentage rate is one such measurement. Just like any other financial product, home buyers need to shop different mortgage lenders and brokers because it could mean thousands or even tens of thousands of dollars in savings over the lifetime of your home loan!
Shopping for a Mortgage Lender or Mortgage Broker
One recent CFPB (Consumer Financial Protection Agency) report showed that, amazingly, nearly half of all home loan shoppers seriously consider only one lender. This oversight can cost you big money over time if you overpay or get the wrong type of mortgage loan. Therefore it pays to shop around and whether you chose a mortgage lender or mortgage broker is irrelevant, finding the best deal is what is important. One way to shop for the best mortgage rates and fees online is our MortgageBite Marketplace.
How The MortgageBite Marketplace Works
Step 1: Submit your basic home loan details and contact information in about 60 seconds. Your contact information remains private until you chose a lender’s offer.
Step 2: Mortgage Lenders and Brokers in your area will bid on your business with their most competitive offers. Lenders and Brokers compete against each other in real-time for your business, so the rates are often better than generic comparison websites.
Step 3: Compare the customized offers you receive and accept the offer that’s best for you. Your private contact information will only go to the lender you chose.
Don’t overpay for your mortgage. Try MortgageBite’s Free rate comparison platform today and get the best deal.