In a current recession with the global economy, mortgage rates have been lows at all times. Many people get a bit confused about the differences between a mortgage broker and a regular bank when they start looking for a lender. This article aims to help you understand the differences and understand the advantages of using a mortgage broker over a regular bank as well. If you’re interested and want to learn more about them, visit https://arvadamortgagebrokers.com/
A mortgage broker is an independently owned enterprise that brokers out loan rates. What this means is that big banks like Bank of American and Wells Fargo offer wholesale rates to brokers because they know that brokers will pick the lowest rate available to offer to their customers. The rates offered by mortgage brokers are much lower than the rates you would get to a traditional bank that only offers its own rates and doesn’t offer competitive rates. What this means is that Wells Fargo could get a cheaper rate through a mortgage broker than walking into a Wells Fargo bank.
As you can see the biggest benefit of using a mortgage broker is that your interest rate will be lower than using your home mortgage through a regular bank. The other advantage is that if you are using a broker they usually have in-house underwriters who can work with you if you have special needs. What we mean by this is that regular banks can sometimes require some pretty heavy conditions that are very hard to meet if you are self-employed. Broker requirements are generally a bit laxer and do not require as much documentation.
The only converse to using a broker, if you consider it a disadvantage, is that the cost of closing is just a bit more expensive. However, if your interest rate is a full point lower than the competition it is worth bringing in another thousand dollars worth to close. With the rate difference, if you do a 30-year home mortgage loan, you will be saving tens of thousands of dollars over the next 30 years!
If you are on the market purchasing a home or refinancing your existing home mortgage, we would highly recommend using a mortgage broker. In the long run it will save you a lot of money and saving money is extremely important in today ‘s economy.