Buying a house takes a lot of time. There are many different steps to go through, and getting everything in order simply cannot be rushed. For many people they would rather make the process simpler and not have to worry about shopping around for a loan. Going to a mortgage lender, rather than a broker, can help speed the process up a bit. And depending on what the borrower is looking for, a lender can often be better.
Mortgage lenders will often offer the client lower fees. They originate the loans in house, and there are fewer people that need to be paid. This results in lower fees paid by the client. On top of that, the client will often get better service, and since everything is done with the lender, the process is smoother and easier to complete. Certain situations will make using a lender the best choice.
For those who have a good relationship with their bank, they can often get better deals than new customers. It is cheaper for the bank to set up an old customer with a new product than a new customer with a new product. They can pass the savings along. For those looking to refinance, they might be able to get around a significant portion of the closing costs since they are not getting a new loan, but modifying an old loan.
When choosing a mortgage lender, you know who will be originating your loan. Companies that have a good reputation earn that reputation by taking care of their customers. If a lender comes highly recommended, it is often worthwhile to pass on the other choices and just take what they are offering.
For those who know their credit score, they can accurately determine what rate they will get. Going to a broker is worthwhile when a person needs to shop around for the better rates, especially if they have less than perfect credit. Those who have amazing credit will be able to know beforehand what their rates will be, and can go right to the lender that offers the best rates.
Length of Ownership
Some people choose to purchase a home even though they will only be in that home for a few years. If this is the case, the lower the upfront costs (closing and loan origination fees) the better. This is true even if it means paying a slightly higher interest rate. It may take some complex calculations to determine where the best deal lies, but often a lender will be able to do that for the borrower.
Depending on the individual’s situation, a lender can offer the right product. Since the lenders are often salaried, rather than paid a commission, they should be treating everyone the same, regardless the size of the loan. The downside is that borrowers can often get stuck with a bad rate, and they sometimes do not get much of a say in which title company they want to work with. For those who want to work with a lender, do some online research as to who is offering the best rates, get quotes from multiple lenders, and then be willing to negotiate the closing costs.