Home Mortgage - Where Your Money Goes

Home is where the heart is. That much is true. But home is also where money is. As the saying goes, “There’s nothing like a home for a good investment.” Touché. This is why for most people, buying a new home is probably the biggest financial decision they’ll ever have to make.

When you’re on the look out for a new home, you need cash. A lot of it. Most homes today have down payments that are more than what the buyer can afford right then and there. The solution for this? A mortgage.

The Difference Between a Bank Loan Officer and a Mortgage Broker

 Loan officers at a bank or a credit union are employees working to sell and process home mortgage and loans for mortgage customers or home buyers like you. Their loan types and mortgage products have several varieties but they all come from one specific originator, their employers.

 The loan officer’s job is to help you process your application for a home mortgage. To see if you’re suitable a certain mortgage product, they will look into your personal credit account and start the approval process for your transaction.

 Home Mortgage brokers on the other hand are professionals who are peddlers of mortgage products. They are the ones responsible for bringing together mortgage lenders and their borrowers. As opposed to bank officers, mortgage brokers are not employees of the lending companies they work for. Instead, they work independently as free lance agents who are on the look out for borrowers looking for a good home mortgage.

So what?

Looking for a home mortgage usually involves you, your money, and a bank officer or a mortgage broker. So what’s the big deal? You ask. The end result is the same – you get a mortgage; you get a new house. But these two job types are different and it is important that you at least understand that difference.

In most cases, banks usually close mortgage loans more quickly than a mortgage broker does. This is probably because a mortgage broker deals with two types of persons – the lender and the client. Resolving mortgage issues between these two is a time-consuming job. This is also perhaps why mortgage brokers charge high for closing fees. A percentage of the closing fee you pay on a mortgage goes to the mortgage broker’s personal funds. This, along with a few more fees, stands as their salary.

Another thing is that mortgage brokers can be more resourceful than banks. Because mortgage brokers do not work for only one company, they have more access to mortgages and loans. Greater suitability and better mortgage options are what mortgage brokers bring to their customers. For instance, your credit history is not that great. Banks generally reject mortgage applications if the credit score is below 670. With a mortgage broker, you can shop around for a lending company that offers bad credit mortgage loans.

 In looking for the home mortgage that’s right for you, make your choice based on the best mortgage terms a lender can offer you. Don’t settle for anything else. If possible, you can ask for home mortgage advice from experts, real estate agents, and even your friends who have recently bought a home.