Brokers offer more choices for the consumer as well as a much higher level of expertise. Our entire economic system is built on competition and consumer choice so let’s look at what each has to offer and I believe the choice will be clear.
Think about it; the average bank may offer three or four different loan programs to every customer that comes through the door. You, the consumer, may qualify for all of them, but the loan officer will likely offer you one. That’s right, ONE product that you may be well qualified for, but that doesn’t mean it’s the best program for you! A Broker, conversely, has several lenders to choose from that each compete for the business of that Broker. Lenders who sign on with brokers compete for that business by offering the most competitive interest rates, the fastest underwriting times, the best technology, the best customer service to the end consumer and the most creative, beneficial loan programs in the industry. The result is that the consumer has access to dozens of loan programs.
Another fact that plays into the competitive edge that Brokers have is massive overhead. A brick and mortar bank chain has enormous overhead while a wholesale mortgage bank can contain it’s overhead and pass the savings on to the consumer through the broker. The overhead expenses that a local, or national bank has force the lender to charge more for the same products. So, how do you choose between a Banker and a Broker?
Choosing is where the expertise of the Broker comes in. Consider these facts carefully. First, Loan Officers who work for federally chartered banks and federal credit unions are NOT required to be licensed. They do NOT have to take the required 22 hours of federally mandated training. They do NOT have to pass federal OR state testing. They do NOT have to complete 11 hours of continuing education each year. Remember the Loan Officer is YOUR contact point. They help you choose the right program for your specific set of circumstances. They are there to solve your problems. Most Bank Loan Originators do NOT know the underwriting guidelines that will be used to complete the loan you are applying for.
Brokers are required to complete all the above requirements. Oh, and one more thing… most Loan Originators that work for Mortgage Brokers ONLY get paid when your loan closes. They are not order-takers or box checkers. That system of compensation forces them to be more competitive, better trained and more motivated to get your loan closed. Staying up to date on market changes and guideline updates benefits the consumer and is a paramount keystone to remaining competitive in this market for Brokers. Salaried employees just don’t need, or have, that edge.
More choice, more training and expertise and more competition means a better experience for you, the consumer. Explore the differences and be sure you are working with an expert on the largest transaction of your life!
