A home will likely be the largest purchase you make in your life. When it comes to financing that purchase, you have lots of options to consider. Government loans, conventional loans, fixed rate loans, adjustable rate loans and more – there are so many mortgage options to choose from.
But while you’re considering your options in terms of home loans, you may also want to carefully consider the source of that loan. If you are a responsible homeowner who is shopping your options before deciding on a lender, you may have another choice to make when it comes to your home loan: mortgage broker or bank?
When it comes to mortgage brokers and banks, many potential home buyers do not understand the difference a name can make. Though both mortgage brokers and banks work with you to get a mortgage, there are key differences that consumers should understand in order to get a home loan that is best for their financial circumstances.
Mortgage brokers are licensed mortgage industry professionals that can offer a wide selection of loan programs from a variety of lenders they have developed relationships with. They act as a ‘middle man’ between you – the homebuyer – and the lenders.
Brokers handle mortgages only. They do not offer other financial services such as car loans or checking accounts. Their job is to be your advocate throughout the process of shopping for a home loan so you can find the loan that works best for you – and your budget. They only get paid if they are able to close on your home loan. This means they will often work diligently on your behalf to negotiate the best terms and find a mortgage that is most beneficial to you.
Here’s a quick recap of what mortgage brokers are – and what they’re not:
Banks are lending institutions that typically offer a variety of home loan options to their customers and potential homebuyers. Bank representatives, sometimes referred to as bank loan officers, are not required to have a license to coordinate home loans for their customers and they can only present potential homebuyers with loan programs that the bank provides.
Still not sure you understand the difference between a mortgage broker and a bank when it comes to securing a home loan? This short, helpful video showcases the key differences between the two and may help you decide which option is right for you.
For more than a decade, we’ve been providing a variety of excellent home purchase and refinancing programs to homebuyers in New York. As a New York State Registered Mortgage Broker based in Latham NY and Queensbury NY, we serve homebuyers in all areas throughout New York State and work with a variety of lenders to find mortgage programs that fit the needs of any borrower, including first time homebuyers to homebuyers with bad credit.
Visit our About Us page to learn more about what Maple Tree Funding has to offer, then make an appointment to meet with one of our professionally licensed mortgage loan originators. At Maple Tree Funding, we work hard to make your dreams of homeownership come true.
Editors Note: This post was originally published in 2014 but has been updated as of September 2020.