"Mortgages can be fun!"
(said no one ever)
We get it. There is a LOT to consider when selecting a mortgage provider. So we broke down the bank vs mortgage broker decision by what are usually the most important criteria: rate, speed, convenience, and reliability.
Price is what most borrowers focus on so we’ll start here. It’s good to get a quote from both your bank AND a reputable broker (ahem!!) to make sure you’re getting a good rate. Banks usually don’t offer competitive rates unless the borrower is moving a lot of cash deposits to the bank. Mortgage brokers have the benefit of being able pick the best rates across loan products from many banks.
It’s not just about interest rate. After all, what good is a low rate if the lender can’t actually follow through with the loan? Generally, with the big banks, borrowers need to fit in one of their “boxes” in order to get a home loan. So if you have less-than-perfect credit or unconventional employment (ex: own your own business) banks may not even consider you…or even worse the loan might get disqualified while in escrow.
Also, keep in mind that employees at banks have varying levels of mortgage experience…and the borrower doesn’t really get to decide who works on their loan. Compare this with how you can pick a mortgage broker: based on past client reviews, years in the business and their overall reputation. You can go as far as handpicking the right person for your exact home loan situation. That’ll never be the case when it comes to the loan officer that a bank ends up assigning you.
Turn times at banks typically aren’t quick, which can make your offer less attractive to sellers. In many cases it can be a non starter when the seller a) has multiple offers or b) has an agent that has lost a deal to a bank loan officer foul-up…and unfortunately these disaster stories are common. Talk to your agent if you are unsure if a pre-approval from a big bank could disqualify your offer BEFORE you lose your dream home.
Most banks use older systems and processes, which result in more of the borrowers time being needed throughout the loan. It’s also one of the reasons behind that “speed” problem we mentioned above. Lastly it’s why we recommend buyers who go with a bank for their mortgage, to stock up on printer toner cartridges (is e-sign too much to ask for nowadays?!).
So here’s our honest, entirely biased recommendation on whether to go with a Mortgage Broker or a Bank. Unless your bank is able to offer a significantly lower interest rate, we recommended minimizing your stress and using a mortgage broker. And whenever in doubt, research reviews (ahem!) of your mortgage provider. It will give you some much-needed peace of mind as you navigate your home purchase. If you are considering getting a mortgage, don’t hesitate to reach out to us and if you want to know more about why to choose us check out this comparison chart.
PS Also, check out our simple eval process where you can choose whether you want to: get real rates specific for your scenario (beware of teaser rates!), see how much home you can afford, get pre-approved, or quickly submit your contact info so we can get back in touch.