When looking at whether or not you should use a mortgage broker or a traditional bank mortgage, there are a couple of important questions: your personal credit situation, rates offered by your bank, fees and costs charged by a potential broker.
1. Personal Credit Situation - traditional banks tend to be more conservative when extending mortgage loans, even to their own customers. In most cases a bank will require more information and will be less likely to offer you a loan if your credit is less than perfect. For many borrowers, a mortgage broker becomes a fall back option for them if they have been rejected by their bank.
2. Rates Offered By Your Bank - in many cases the retail interest rates offered by your bank will be higher than those available through a mortgage broker. Still this is a premium many borrowers choose to pay for the familiarity of their local bank. Mortgage brokers have access to a wide number of different wholesale lenders, so they can often locate a more competitive rate for you. However, many banks do offer discounts for their own long-term customers.
3. Fees and Costs - the advantages of a mortgage broker come at a price. In many cases their fees can be very substantial; possibly even negating the advantages of a lower interest rate. Before you sign any agreement, you should question each and every fee charged to you; as sometimes simply being persistent can lead to a lower rate.
Cost really is the ultimate decider between a bank or a broker, if the fees and costs prove too hefty, then a broker probably isn't worth it. A local bank can offer the comfort and familiarity of dealing with an institution you know and trust, but it can also be more expensive. Ultimately its the numbers that matter most, the options that leads to a lower bottom line is often the best choice.
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