Home Mortgage

When in the market for a mortgage one of the things you will find is that you can work with a number of professionals. With home mortgages however, most persons either deal with a mortgage broker or a loan officer.  Many persons tend to believe that there is no difference in these two positions but there is a difference in the roles they play and what they can and cannot do and these differences can decide the kind of mortgage loan you get.

A mortgage broker can be considered as the middle man in the business. Arranging or making a decision on financing is not what they do. They work along with a number of different mortgage loan institutions and submit their client’s loan application to these institutions for approval. The broker generally takes your application and does checks on things like your credit score, income, and other things before they send off your application to the different mortgage lending companies. The broker will have an idea as to the best lending institutions that fit your needs and will most likely approve your loan. The mortgage institution will contact the broker with their offer and the terms of said mortgage including interest rate they are offering.

A loans officer on the other hand is someone who is employed to a mortgage institution such as a bank. The loans officer is the person who approves or disapproves your mortgage loan application. Usually your credit history and your credit rating will be checked by the officer when they receive your application. They will use this information to assist them in deciding whether or not they can make an offer to you. Once you have been accepted you are able to meet with the loans officer and strike a deal with him as per the conditions of the mortgage such as interest rates, the term, and the type of mortgage. The loans officer is the person who can change the conditions of the loan including the penalties to be incurred for prepayment.
The advantages of using a mortgage broker include:

• Several lenders will receive your application at the same time.
• A credit check is done only once.
• Far less paperwork needs to be completed as only one application is necessary.
• They know which institutions are best for you based on your current situation.
• The broker acts as the middle man and will do their best to get the best deal for you from the mortgage lender.
• Mortgage brokers usually have a great relationship with multiple lending institutions and their loan officers.
• They can barter for the best interest rates on a mortgage.
• You will be able to meet with your broker regularly.
• Your broker will let you know the amount of money you are qualified for in a mortgage.

In spite of their inherent benefits to the customer both mortgage brokers and credit officers have their disadvantages.

The disadvantages of using mortgage brokers are:

• They may not be working with certain mortgage institutions and may be missing some opportunities for better interest rate deals.
• The benefits of finding lending institutions online may not be had if the broker has ne dealings with them.
• Some lenders pay points to brokers so you may find yourself with higher interest rates.
• You are usually considered a number to potential lenders as no face time is available.

The disadvantages of using a loans officer are:

• Only one mortgage loan quote is given.
• Several credit checks are done when you apply at many different lending institutions.
• Should you be unsuccessful in acquiring a mortgage then you will have to reapply and go through the process all over again.
• A lot more paperwork to be filled out.
• It can be very time consuming meeting with the loans officer to discuss your needs and wants.

When deciding whether or not to deal with a mortgage broker or a loans officer to get your home mortgage it is good to realise that the decision is entirely your and will be dependent on your current and future situation. Always go with the one that offers you the opportunity to get the best deal.