When you're ready to buy a home, you'll need to secure a mortgage. Going through the mortgage qualification process can be one of the more stressful aspects of buying a home. Choosing the right lender could make a difference in whether you qualify or not. You can choose a direct lender, such as your bank, or apply with a mortgage broker. Here's a look at the differences between the two choices and the advantages of working with a broker.
How A Direct Lender And Mortgage Broker Differ
A direct lender provides money for your loan. This might be a bank or credit union that you normally do business with. The loan process starts and ends with the lender, and they have full control over whether you get approved and the terms of the loan. A mortgage broker works with several lenders who provide wholesale mortgages. Instead of loaning you money directly, a mortgage broker looks at your financial data and matches you with the best lender. If you have a personal relationship with your local bank and good credit, then getting a direct mortgage from your bank may be a good choice for you. However, when you work with a broker, you have access to loans from a number of different sources.
The Advantages Of Working With A Broker
Mortgage lenders have different requirements for their loans. Some loans are easier to qualify for than others. If you have a limited down payment, poor credit, or other financial challenges, you may have a hard time getting a loan through a direct lender. If you're turned down, you have to start the application process all over. It would be time-consuming and exhausting to apply to different lenders yourself. When you work with a broker, you apply once and let the broker deal with the different mortgage companies on your behalf. This gives you access to a wide range of mortgages so you have a greater chance of finding a good match with terms you can afford.
How To Find A Mortgage Broker
Your real estate agent might refer you to a broker they work with, or the agency might have an in-house broker. However, you can choose any broker you like that you find through referrals from family and friends. When searching, you'll want to look for a mortgage broker service rather than go to your local bank since a bank is a direct lender and doesn't broker mortgages. It's usually easy to find a mortgage broker, and when you do, you may find their services save you a lot of effort when it comes to finding the right mortgage.
Contact a company like Cornerstone Residential Mortgage to learn more.