SHOPPING FOR A MORTGAGE LENDER
There are several potential lenders in today's marketplace. They include:
Mortgage Banks - A mortgage banker is a direct lender. He or she qualifies applicants, finds the best available loan and funds it. Because this is their main business, mortgage banks can offer very competitive rates but are not necessarily the cheapest.
Mortgage Brokers - Brokers don't lend money; they find lenders for a fee in addition to the traditional application and processing costs. While a good broker might be able to find you the cheapest mortgage, make sure the fee doesn't offset any savings. Since most brokers' fees are paid by the lender in the form of a commission their services can cost you nothing - that is, no out of pocket costs. Something also to remember - a mortgage broker is the legal agent of his or her client and does not work for the lending institution. So the mortgage broker will have access to the widest spectrum of loan options - whereas a bank or savings and loan representative will draw from only "in house" loan options. Going by this information, a reputable mortgage broker would most likely be your cheapest source for home loans and refinancing.
Savings and Loans - Once the primary source of home financing, savings and loans hold a much smaller piece of the market today. Some experts recommend checking their offers before looking at a bank.
Banks - Commercial banks have come on strong in the recent years. Some have made home loans a significant part of their business.
Credit Unions - A good source often overlooked by borrowers. Credit unions function like brokers because they generally don't lend their own money.
Whichever route you untimately take, be sure to shop around. What lenders charge might differ by as much as two or three percentage points. That is pretty significant when you look at the impact on a 30 year fixed mortgage - depending on the size of the loan, the difference could be a few hundred dollars a month!
Bryan Vogt
Strano & Associates, Realtors® - GMAC Real Estate
(618) 355-5824
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# posted by
Bryan Vogt @ 1:36 PM
