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Dennis Said:

Mortgage Lender or Mortgage Broker?

We Answered:

Disclaimer: I am a mortgage broker / planner so I see this from my point of view.

But here's the main difference between a Mortgage Broker and a Mortgage Banker (lender).

A Mortgage Banker works for a single lender, and only has a set number of programs and options to offer you, and are captive to their own products.

A Mortgage Broker often works with 100's of lenders, including wholesale lenders (who often don't deal directly with the public consumer), and have a very wide range of product and lending options available to them.

Also, if you walk into your local bank, S&L, or retail mortgage bank they'll usually take your application there, perhaps underwrite your loan there, and lend their own money. If your loan is declined for whatever reason, you will need to begin the process again with another source. With a multi lender source, you have another chance if one lender doesn't approve your loan.

Which is better? Well from where I stand, I think a broker is better, but you still need to find one that will really do the due diligence work for you. Work that you would otherwise have to do by shopping your needs around to multiple lenders on your own. Rates aren't what your looking for with a broker, honesty and good communication skills are; outside of that all brokers have access to similar rates for the most part.

Hope that helps describe the difference in a not too slanted point of view.