Your Decision to Choose Mortgage Bankers or Mortgage Brokers

In earlier days, when you had to apply for a mortgage, it was very common to visit the local banks – the financial institutions where you kept money or other valuable items, to obtain a home loan. Giving an exact date may not possible, but it is for sure that we are in a more modern time, hence the process has also changed a lot.

No doubt, financial institutions like banks and credit unions are still there occupying a larger market share for a mortgage origination, however many companies are also there whose businesses are specifically defined, i.e. originating mortgages.

Just by looking at the market place, one can imagine the opportunity of making money because of the companies that provide mortgages or help find mortgages for home buyers, not only by looking at the interest rate, but also closing costs, hidden costs or other fees. When considering companies that specialize in mortgage lending, one finds only two categories for mortgage originator, and that are; Mortgage Banker and Mortgage Broker.

Let’s know about the mortgage banker first. While doing a business with a mortgage banker, you deal with the company directly for obtaining a loan. The word "direct lender" is being used just to describe your mortgage banker. Although, your mortgage banker cannot be termed as a complete mortgage, meaning you may not approaching the same company to make your mortgage installments, however, it depends solely on its decision whether or not you meet the loan approvability guidelines. A mortgage banker may or may not typically limit to the products that are offered to the borrowers. However, it is must for mortgage bankers to maintain strong relationships with "wholesale" lenders.

On the other hand, mortgage brokers fulfill the same needs, but in a different manner. Although, mortgage brokers are not lenders, meaning they do not give approval or rejection to a mortgage application, yet have the flexibility of drawing from an array of lenders for borrowers to locate the exact match and get a mortgage loan approved.

Assuming that mortgage brokers bring a middle man kind of effect that is broker to lender and then to borrower, which puts more costs to the borrower is not completely fair. In reality, mortgage brokers such as Vancouver mortgage brokers do not deal into the retail world of loans. Most of the direct lenders that you may access can have a direct wholesale department which is meant solely to serve the loans. Such departments can also be referred as wholesale lenders as these offer viable pricing which is often not available to the people, thus help brokers to offer competitive pricing with respect to mortgage banker.

These are just some of the differences between mortgage bankers and mortgage brokers as it is your sole decision to choose any of them.

The writer of this article is one of the best persons associated with the field of technology in financial resources. He has a lot of experience in counting words that sum up as details regarding to the loans and mortgage issues.