Mortgages... Your bank or a mortgage broker?

A home is one of the biggest purchases that you will ever make. Few people can afford to pay for a house in full; the most common way to buy a home is with a home mortgage loan. There are a couple ways to get a mortgage- work with a mortgage broker or apply for a mortgage loan from your bank.

A mortgage broker is an independent agent that matches you with a home mortgage loan. You fill out one mortgage application and the mortgage broker shops around to find you a lender that will loan you money and give you the best terms. You do not pay a fee for using a mortgage broker- they earn a commission from the lender that you choose. You could shop for loans on your own but it would take a lot of time and you would have to do a lot of paperwork.

Most people bank at a national institution. These large banks often have a wide variety of different home mortgage loans available. You may want to use your bank for a home mortgage if you have a good relationship with them. Some banks offer incentives, such as slightly lower interest rates, for existing bank customers. Many people also like the fact that their mortgage loan can be connected to their other accounts when they use online banking.

There are pros and cons to both banks and mortgage brokers. A bank may give you less personalized service, but if you have a problem with your loan you can take it up the corporate ladder until it is resolved. A mortgage broker will work with you every step of the way, from applying to a loan until you close on your property. Over 65% of people that apply for loans use a mortgage broker; most feel that a mortgage broker is best at finding the lowest interest rate and the best terms.