IS THERE a difference between a bank loan officer and a mortgage broker?
Nowadays, bank loan officers don’t have a generalize rates, meaning if you call a major bank loan officer in one branch for a loan quote, you could possibly shop the same bank but different branch and get a different price quote? Why is that, loan officers are driven by sales commissions and sales quota, does not matter if it’s the largest bank you are talking to, all loan officers will price your rates and fees slightly different, so make sure you do your homework and shop your best rates and fees.
If you are looking for a mortgage, you may have been advised that it’s better to go through a mortgage broker. This seems to make sense. After all the broker works with mortgages all the time. So of course the broker knows more than you. Brokers are experts, aren’t they? Especially now, mortgage brokers have to have a license called NMLS which some banks don’t require their loan agents to have, therefore speaking to a educated and well trained loan officer or broker is critical to your next 30 days process to closing on a home loan.
This is generally true. But it doesn’t mean that you have to accept everything the broker says, or be completely uncritical. There are some things you need to look out for.
– At one time just about anyone could set up as a mortgage broker. Now brokers have to be regulated by the NMLS (Nationwide Mortgage Licensing System) go to their website to check on brokers licenses : mortgage.nationwidelicensingsystem.org/
– All brokers are supposed to offer advice and a recommendation. Beware of a mortgage broker who claims only to offer information. This may be to forestall potential complaints.
– Be extremely wary of a broker who encourages you to bend the truth in order to get the mortgage you want. It’s part of the mortgage broker’s job to make sure you get a mortgage which you can afford and which is right for your circumstances.
– Some mortgage brokers will tell you that they are “Direct Lenders” when they only in fact mortgage bankers or brokers. Direct lenders now a days to me does not mean a thing, it really only means the direct lending company is funding the loan under their name temporarily. Sooner than later all loans are sold in the secondary market and then your servicers will take over.
– A mortgage broker who works on a commission basis may seem cheaper. But can you really be sure that the broker is recommending the product that is best for you, rather than being swayed by the commission? Of course most brokers are honest and genuine. And they are actually bound by their professional code to give the advice that is in the client’s best interests. But if this is a worry for you, choose one that operates on a fee basis.
– If you do use a mortgage broker who operates on a fee basis, avoid one who expects you to pay the bill before completion of the transaction. This can cause problems if things change or break down later on. Check at the beginning when the broker expects the fee to be paid.
Experience mortgage brokers are a big help they can source out different lenders to find a suitable financing package for you. Make sure you not only feel comfortable but confident that your mortgage broker can deliver and close your loan on time.
Buying a house now will be a great focus for the coming years due to the Real Estate market showing traction.
Always remember you are the customer. Don’t let yourself be over-awed by the broker’s expertise. A good mortgage broker will always be happy for you to check everything and ensure that everything is being done in your best interests.
Most important advise for you to follow, get all the fee and rate quotes in writing and make them guarantee it.
Ken Go, a mortgage Broker for 26 years and have gone thru market ups and down, will have a lot of experience to share with you and knowledge to lead you to the right direction in home financing.
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For more help or inquiries, call Ken Go at (562) 697-7028 or write to [email protected] NMLS #238636.