When you embark upon the journey of becoming a homeowner there’s plenty of questions you may have along the way. Here at Financial Mortgage Solutions, we strive for integrity, honesty and to be informative and upfront with our clients throughout the entire process of securing mortgage financing for our clients. Often times our clients and mortgage consumers merely want a simple explanation to answer financially related questions about their Loan Estimate or Closing Disclosure, in layman’s terms. Other times, really great questions arise that deserve a longer and more involved explanation. That’s why we decided to write this blog post: “Why choosing a mortgage broker over a big bank lending institution is ideal of your home purchase or refinance”! It’s a long title, I know. With that lengthy title comes a deeper, more involved explanation to better quantify why working with a loan officer at a mortgage brokerage versus a loan officer at a bank or credit union, such as Bank of Albuquerque, Bank of America or New Mexico Educators Credit Union, are more beneficial in financing your home loan.
“What is the big difference between a mortgage broker and a big bank like Bank of America, or Wells Fargo for mortgage financing? We will elaborate on this topic later in this blog post on precisely WHY mortgage brokers have more flexibility and work with different mortgage lenders to tailor the perfect home loan to your specific needs.
“Does it really matter if I choose a bank or a mortgage broker for my home loan?” The short answer is YES, it really does matter who you, the homebuyer, choose to hire to secure financing for your home purchase or refinance.
Mortgage brokers are held to a higher standard than banks and mortgage lenders when it comes to loan costs to the homebuyer for a home purchase. Laws have been passed that limit mortgage brokers in their level of compensation for originating a loan. For whatever reason, banks and lenders are not held to the same standard regarding loan officer compensation. If you put two and two together, this means that the higher the compensation level is for the loan officer, the higher the interest rate and fees are to the homebuyer. In addition to this compensation cap, mortgage brokers must also disclose their compensation (yield-spread premium) at closing. Again, lenders and banks are not held to this standard. At the time of closing on your home loan, the lender credits the brokerage as a percentage of the amount financed. Whereas, a big lending institutions, like Wells Fargo or a smaller institution like a New Mexico Credit Union, is not required to disclose to the homebuyer what kind of compensation is paid to the loan officer during any part of the loan process. As a result, there is a potential for the homebuyer to be overcharged by a bank and not even realize it. Often times, the homeowner ends up with a higher interest rate due to the lack of full disclosure on their home purchase.
Mortgage brokers are flexible. As a mortgage broker, we work with several different lenders offering a wide array of home loan products. Wholesale rates with a loan officer at a mortgage brokerage can actually be much cheaper compared to what you’ll get with retail bank's lending rates. Different mortgage lenders specialize in different areas and have different niches targeted toward different homebuyers. By pulling together several different mortgage lenders, it provides the homebuyer with several different home loan options that fit their specific needs. By going to a big bank or direct lender, the homebuyer will be limited to their specific home loan products and underwriting guidelines. This could result in a "cookie-cutter" loan that doesn't actually meet the homebuyer's needs and financial goals. Additionally, mortgage brokers are quicker to adapt to the ever-changing mortgage market. The home loan market is always changing, and new home loan products are starting to be made available to the homebuyer. The mortgage broker is better positioned to offer these new home loan products as soon as they are made available, because brokers have relationships with multiple mortgage lenders.
Mortgage brokers are your advocate. Mortgage broker's compensation levels are fixed at a set level with several different mortgage lenders. This means that as a mortgage broker, we do not have hidden agenda to put you into one type of a home loan versus another. We can honestly, and objectively put the homebuyer in the best home loan with the best mortgage lender fitting of the homebuyer's needs. We work for the homebuyer, and are not subject to minimum mortgage loan quotas like a big bank, such as Lending Tree, would be. This means that mortgage brokers have a vested interest in their client’s goals of becoming a homeowner, and not in some agenda dictated by a big bank. We are with you every step of the process. We work with your Realtor and you, as a team to help you with your dreams of buying a home. Bank employees at retail lending institutions get paid wages to work at their bank as employees. In some situations, loan officers at banks are even paid regardless of whether they close a home loan or secure financing for a home loan. The loan officer at mortgage brokerage does all the legwork for you,
Financial Mortgage Solutions is a mortgage brokerage licensed in the state of New Mexico. We have experienced loan officers with integrity. We hold our licensed mortgage loan originators to the highest standards for home loan mortgage transactions, which sets us apart from other brokerages and big banks in New Mexico. We work with multiple wholesale mortgage lenders with various loan products allowing us to dynamically respond to the needs of our clients and their financial goals. We are here to help homebuyers secure mortgage financing for every type of mortgage transaction in every city in New Mexico. Our goal is to find the perfect home loan for your specific needs as a homebuyer. Call us to find out if you prequalify for a home loan! (Albuquerque, Santa Fe, Corrales, Foothills area, Placitas, Rio Rancho etc.). Or you can check out our Quick Quote page!