The difference between a broker and a bank
With the upheaval in how mortgages are approved and obtained the last few years many consumers seem to feel that bigger must be better, and entrust their loan application process to well known, big name banks.
However, that isn’t always to their benefit. Big banks charge you dearly for their good name, and often they have a loan program and rate of the day and that’s your choice. Also, they may have one set of guidelines and if you don’t meet those criteria they will have nothing else to offer you.
In addition, the manner in which mortgage loan originators are compensated has always rewarded smart high producers at a higher level if they work outside the corporate banking environment.
As such, the really good loan originators seldom are found in Banks (with a few notable local exceptions); rather they are generally found in independent brokerages. Smaller companies allow for a more entrepreneurial atmosphere and reward those who work smart and retain their client’s loyalty over the years.
A good loan originator is one who’s goal is to become your "go to guy" for your mortgage requirements for many years to come. He will take time to understand your goals, strengths and weaknesses and learn how to balance all to position you to get where you want to go in the future. He will know your real estate holdings and your loan terms and periodically review them with you to be sure you are in the best loan program for your situation.
Unlike a loan officer in a bank, a broker often has multiple resources for placing a mortgage loan and if your situation doesn’t fit one lender he can work to place it at another lender.
If you want a loan originator who views what he does as a profession and career you will be more likely to find that in a smaller mortgage brokerage than at a large bank. While I have great respect (and several good friends) who work for banks as loan officers I think they would agree that their goals and product offerings are different from mine. Often times we collaborate and refer clients to each other if we can’t individually deliver the loan or the parameters that are best for the customer. However few loan officers in banks seem to develop such relationships and if they can’t squeeze the customer into the programs the bank offers simply tell their customers "so sorry".
And best of all, more often than not a mortgage broker can beat the rate of a big bank. I know lately we have gotten loans closed for clients who compared us to the big boys and we won hands down.
Getting a mortgage today is harder than it ever has been, and you need an experienced hard working individual to smooth the way and direct you on how to get the best deal out there.