Bank Loan Officers are employees of a lending institution working to sell that bank’s mortgage. The loan officer helps you complete the application for the mortgage, checks your credit report in order to help you get pre-approved for a mortgage, presents you with the options that best suit your needs and negotiates the terms of the mortgage with you.
Bank Loan officers generally understand the specifics of the local real estate market, they can negotiate extra perks within the bank (think home equity lines of credit, banking fees, etc.) and they are easy to access if you need to make changes or speak with someone. You will however, have to do all the leg work in shopping around for the best rate, negotiate on your own behalf and approval may be difficult if your credit report is less than spotless.
Mortgage brokers are professionals that earn a commission by bringing together lenders and borrowers. They are freelance agents that work with hundreds of lenders (including banks) and are paid by the lender when they secure a good borrower. They find and evaluate home buyers, analyze each borrower’s credit situation, calculate approximately how much can be borrowed, negotiate mortgage terms on your behalf and determine which lender is the best fit for your needs.
Mortgage brokers can often make loans that a bank refuses (think self-employed people or less-than-stellar credit reports) and find lenders for unique investment or commercial properties.
Which one is right for You?
Ultimately make your choice of a lender based on the best loan terms you can find for your individual circumstances. If your credit history is spotless you will have more options. Talk to both the bank(s) and a mortgage broker and compare their offers. Get referrals from your Real Estate Agent and/or friends who have recently bought a home.
Research is essential when making this important of a decision. Getting pre-approved for your mortgage is the first step in the home-buying process that lets you know what you can afford AND avoids any surprises or disappointments before the home search begins.
If you have any additional questions about the home buying process, feel free to drop me a line here.
Thanks for reading,
Alex
clay john says:
I bought a house in Bowmanville couple years ago, and i am thinking of getting a HELOC on my property. I need to know if this is good time to do so.
Alex Beauregard says:
Hi Clay John,
Thanks for reading my blog & reaching out. In my experience, whether or not you should cash in on your home equity now ultimately depends on how you plan to use the money… i.e whether you have a single expense like a kitchen reno and need a lump sum, or if you need a series of payments over a period of time. The best person to speak with about interest rates and risks involved would be your mortgage lender, but be sure to compare offers from credit unions and other banks as well for the best deal. Hope this helps!