In the process of buying or refinancing a home, most people visit a loan officer at their local bank or credit union branch.
Bank loan officers sell various lending vehicles and offer mortgage rates from a single institution, generally their partners or in house departments.
Mortgage brokers work solely in a borrower’s interest and are dedicated to seeking out the lowest available mortgage rates and the optimal loan programs. They search across multiple lenders and institutions. Brokers are limited to lenders by their approval to work with each lender. Those limitations mean mortgage seekers should take on some of their own legwork when searching for the ideal loan.
A broker is serving several clients simultaneously, and brokers don’t get paid until a loan closes. If a loan originated by a particular broker is declined or fails in underwriting, the broker will simply move on to the next potential lender.
Bank loan officers, particularly at larger banks, might keep borrowers at bay for an extended strecth. That officer is likely working with a host borrowers at various stages of the process, and until a loan originating through a loan officer is funded or declined, it will essentially be in limbo. Loans declined through a loan officer mean action comes to a halt from that bank and the borrower will need to move on.
There are, however, lenders who work only with mortgage brokers and that provides borrowers with access to a range of lenders.
Brokers may also be able to get lenders to waive a range of fees. Some brokers can avoid paying origination, application and appraisal fees altogether.