The answer will depend on your situation and preferences. Mortgage brokers can advise you on mortgage loans and help you organize the loans and interest rates that different lenders offer. However, mortgage brokers cannot issue the mortgage loans themselves. Banks, on the other hand, can actually issue you the mortgage loan.
Brokers Explained
Mortgage brokers are a financial institution, but they cannot actually provide the money for the loan. Brokers serve as a third-party intermediary between the borrower and the lender in the loan transaction. They are able to effectively gather information from lenders concerning mortgage loan amounts and interest rates.
Mortgage brokers have the ability to advise their clients on all of the lenders available in the market. Therefore, brokers can present you with a variety of available options, thereby helping their client find the most suitable mortgage possible.
Brokers can also save borrowers the time and effort of having to research a variety of lenders, because they have regular and consistent contact with lenders. The mortgage loan application process can be very time consuming. Brokers can take care of the initial leg work needed in terms of the required communication and documentation required by each lender.
Mortgage brokers have greater experience when it comes to applying for mortgage loans. Therefore, they have a good idea of whether or not a particular bank will accept or reject their client’s mortgage application based on their client’s specific financial situation. Mortgage brokers can advise their clients on what they can do to strengthen their position and better prepare themselves to apply for a mortgage loan.
Banks Explained
Banks are the financial institution that can actually provide the mortgage loan. Individuals can go directly to a bank to obtain the loan on their own without the use of a broker. Individuals who do not need or want to be advised through the mortgage loan process could choose this option. However, banks also work with mortgage brokers and their clients.
It is important to keep in mind that mortgage brokers may not always secure the best mortgage for their client. This can be due to a variety of reasons and is why some individuals choose to go to a bank directly to apply for a mortgage loan. Additionally, mortgage brokers may charge their client a fee for their services which is important to keep in mind when analyzing the different mortgages being offered.
The decision to use a mortgage broker or go directly to a bank is yours to make. Understanding what each path offers is important in deciding which route is the best for you.