Mortgage Broker vs. Bank: Who Should You Use for Your Wichita Mortgage?

Let's talk homeownership. It's the goal of many individuals to one day own their own homes, but how do we get there? There are numerous ways to obtain a mortgage, but we are going to dive into the two most common: brokers and banks.

There are pros and cons to using both a mortgage broker and your bank. Depending on your particular situation, there might not always be a choice in the matter. Most homeowners will gravitate toward using their banks when making this decision because they think it will be easiest, but that is not always the case.

How does this decision affect the overall loan process?

Deciding between banks and brokers will heavily influence your loan process, so let's answer the obvious question: what is a mortgage broker?

A mortgage broker is a mortgage professional that arranges mortgages between borrowers and lenders. Brokers have many different options when it comes to shopping for a mortgage, helping you find what's best for your specific situation.

One of the biggest reasons that homebuyers will gravitate toward their bank is because of their personal relationships there, but there's a cost. Banks don't have to disclose their commission numbers, which could result in the buyer being overcharged.

Additionally, working with a bank doesn't always mean working with a mortgage professional. Anyone involved in the loan process could call with questions and end up with a general banker or customer service agent, potentially only creating more confusion. Working with a mortgage professional directly helps prevent a buyer from missing key items and having a late closing.

Mortgage brokers have the advantage when it comes to contact. Alongside having your own personal mortgage professional helping you, they are also local. Your mortgage broker will always be available to you. When the buyer calls about the loan process, they won't be calling a 1-800 number and getting lost in the mix. They will speak to an educated mortgage professional who is handling their specific loan. By giving you constant access to anything you need, a mortgage broker can typically get the buyer to the closing table faster than your bank.

Credit Score Requirements

There are many different factors that influence the mortgage process, but arguably the biggest, and definitely the most talked about, is your credit score. Both banks and brokers look at this score, but its importance and flexibility differ depending on which you choose.

When it comes to banks, their standards are not very forgiving. Typically, banks will have a certain credit score buyers have to have in order to proceed in their loan process, making your wiggle room as a buyer pretty tight.

Brokers, on the other hand, have the advantage when it comes to credit score requirements. With a broker's ability to shop for different lenders for their clients, the credit score requirements are much more flexible, opening the door for buyers to obtain a mortgage when they might otherwise be turned away.

Interest Rates

The consistent difference between banks and brokers is the broker's ability to shop the market for you. When it comes to interest rates, it is no different.

While it's true that neither a bank nor a broker can fully control what the buyer's interest rate is going to be, banks will still have a more set rate and less room for flexibility.

Brokers have a little bit more of an advantage here to make sure buyers are getting the best possible interest rate at the time of their loan. A broker can compare the wholesale mortgage rates from multiple different lending options all at once, giving you the opportunity to secure the best possible rate on your home loan.

Each Experience is Different

Being a buyer in the real estate market can be intimidating. From attending multiple showings to sitting down at the closing table, there are so many roles to be played. With all the moving parts, many buyers rely on referrals. So, who should you use for your home loan? When shopping around for your home loan, get in touch with multiple mortgage professionals so you can accurately decide what type of process you want. Most commonly you will be referred to a mortgage broker or bank. The question is: how reliable is that referral?

Working with a bank can lead to different experiences. Confusion and inconsistent reviews can result from not being in contact with the same mortgage professional throughout the loan process. With that inconsistency comes difficulty in confidently guaranteeing any type of loan process.

When contacting your local mortgage broker, the buyer will consistently speak with a broker and their team. Even though the broker will connect buyers to different lenders, the buyer is in contact with their broker throughout the entire loan process, leaving very little room for confusion. When the buyer is referred to a mortgage broker, you can confidently predict what your loan process will look like. Buying a home is one of the biggest investments of your life. It doesn't have to be stressful when working with a confident, knowledgeable, and well-trained mortgage professional.

How can I find a Mortgage Broker?

JR Mortgage Group is a mortgage brokerage located in Wichita fully equipped to handle all your mortgage needs. Visit www.jrmortgagegroup.com/information or call 316-247-9639 to get in touch with one of our mortgage brokers today!