Every borrower’s circumstances are unique. Home loans are available in a variety of configurations. Navigating through the choices and understanding the complexities can be somewhat daunting. Making the best decision about a home loan requires knowing the marketplace, understanding the terms of the loans that are available as well as knowing what loan a person can qualify for in order to buy a home.
Loans are available from banks, non-bank retail lenders and can be obtained with the help of a mortgage broker.
Here is a description of the differences:
Bank Loans
Banks make loans directly to their customers. They fund the loan, service the loan, and charge bank fees to the borrower. Bank loans are not very flexible. Bank loans from major banks are subject to general rules that apply to everyone, such as credit score limitations and debt-to-income ratios.
Non-Bank Retail Lenders
These lenders specialize in home loans and do not provide other bank services. They charge fees for application processing and loan underwriting. They package loans that they underwrite and sell them to others. Loans from these lenders are a bit more flexible than loans from banks. They typically offer a wider variety of options than banks have. However, they still use general rules such as credit score limits and debt-to-income ratio when making lending decisions.
The Advantages of Working with a Mortgage Broker
A professional mortgage broker from the OKavage Group helps a borrower by making a match between the borrower’s needs and the loans available. Since a broker is independent of banks and non-bank retail lenders, the broker can find the loan that best meets the needs of their client.
Brokers are paid by the lenders and typically do not charge clients any underwriting fees or other fees to process a loan application. Brokers work closely with clients to get them approved and to help them close a loan because they do not get paid for loans that do not close.
There is a tremendous advantage in working with a qualified mortgage broker to find a home loan that meets your requirements. Working with a mortgage broker like the OKavage Group gives a borrower more choices to consider from many more mortgage loan options that are available than working with just a bank or a non-bank retail lender.