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Broker or Bank

Where should I go to get my loan?  Should I go to a bank, a mortgage banker, or a mortgage broker?  Let's take a look at the difference.

Technically a bank or a mortgage banker are the same.  They are both direct lenders.  They will take your loan application and they will fund your loan.  Unfortunately you will have their limited choice of loan products and their limited loan qualification criteria.  If they decline you for a loan you will have to go to another lender and start all over again, pay an application fee again, pay for another appraisal, and pay for a new credit report.  Some lenders only want the best credit qualifying borrowers.  Others are willing to take a little more risk.  And some specialize in credit challenged borrowers. 

Mortgage broker.... with a mortgage broker you will have the loan products offered by many different lenders.  The mortgage broker's job is to take your loan application and shop the market for the funding lender that likes you as a credit risk.  The mortgage broker will match you with the funding lender that likes your income history, credit history, and the property you are trying to get a loan for.  If one lender doesn't like what they see, the mortgage broker then takes your loan package to another lender, and so on until he finds the funding lender that likes you.  And all this costs you nothing if the mortgage broker can't get you approved with a funding lender.

Remember.... all lenders and mortgage brokers are not the same!  By this we mean that they are not all good guys.  If you don't get those warm fuzzy feelings when you interview your lender, if you don't think they are working for you and your best interests... go find another one.

Very important!  The loan officer working for the bank or direct lender, works for the bank or the direct lender.  He or she does not work for you.  He or she is not contracted to you.  He or she has no liability to you. 

Loan officers working for a bank are not licensed.  They are not regulated by the SAFE Act, nor are they licensed by the state they work in.  They are not required to give you full disclosure regarding the income they are making.

Loan Officers working for a mortgage broker, work for you!  They have a fiduciary responsibility directly to you.  They are licensed by the SAFE Act and the state they work in.  They are required to give you full disclosure and disclose every penney that they are earning.  There is no hidden income when you work with a mortgage broker.

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