Home Lenders vs. Mortgage Brokers: Which One to Select?

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Home Lenders vs. Mortgage Brokers: Which One to Select?

home lenders

Are you planning to make a loan for your new home in Bergen County? Good news, you can get your loan approved from several places, so you have many options. However, there’s a catch to that—among all the mortgage providers in town, only one person or company can bring you closer to your dream home.


So, is it going to be the home lender or the mortgage broker? Here are the pros and cons of applying for a mortgage in Bergen County through home lenders and brokers to help you decide.


Home Lenders


The first thing that probably comes to mind when getting a mortgage is to apply for the loan with the nearest bank. A lot of people find that convenient. However, obtaining a mortgage loan from a bank may not be for everyone.


Here are some of the pros and cons of getting a mortgage from home lenders in Bergen County.


PROS:


  • Extra Savings

    Cost savings is one of the primary factors why many opt for home lenders. Home buyers want to save on commission fees that brokers or intermediaries may charge their clients. Some home lenders like banks also make considerations when a borrower has an existing account with them. So, if you have a savings account, there’s a chance you get a home-court advantage if you apply for a loan in your bank.

  • Direct Borrower-Lender Communications

    Working without brokers means applying directly through home lenders in Bergen County. That also means that you get to speak with your lender directly. Who knows, maybe, you can work things out, and they’ll listen to your concerns. Direct communication is the key to people who know the art of negotiating.

  • Less Processing Delays

    Another advantage of applying for a mortgage through home lenders is faster turnaround time. Most home lenders, such as banks, already have an in-house underwriter, so assessing the loan application may be more manageable. Likewise, since most of the processes are done internally, the home lender can control some variables that affect the loan’s immediate approval.

CONS:


  • Rigid Requirements

  • Home lenders typically receive a high volume of mortgage applications. Hence, they can be very strict with their loan approval process.

    Most Bergen County home lenders also require borrowers to have a credit score of 620 and above to qualify for a loan. Getting a high credit score can be challenging for some, especially first-time home buyers.

  • Limited Options

    Bergen County banks may offer you unfavorable mortgage payment terms. Since you are only dealing with a single financial institution, you can also never be sure that you’re getting the best Bergen County mortgage rates.

  • Higher Costs than Savings

    Some banks may provide higher origination, application, and underwriting fees than what you can save from shouldering your mortgage broker’s commission. You might be in the losing end if you don’t weigh your options thoroughly.

bergen county mortgage broker

Mortgage Brokers


Some people find shopping around for the best mortgage terms overwhelming. Hence, they seek refuge from mortgage brokers Bergen County has to offer. Mortgage brokers are your to-go persons or companies when looking for the best mortgage terms in town.


If you’re wondering if you need a mortgage broker, here are the advantages and disadvantages of seeking a broker’s services.


PROS:


  • Access to Better Rates

    The number one factor why many seek Bergen County mortgage brokers is access to better loan terms. Because brokers know a lot of home lenders, they can help you shop around for better deals.

    Mortgage brokers know where the gems are in terms of home loans. You’ll have peace of mind that you’re getting the best rates for your home loan.

  • More Experienced People

    Mortgage brokers are usually more knowledgeable and experienced with how mortgage loans work since they handle various home loan applications with different lenders. Because of this, they can help you make an informed decision.

    Additionally, large home lenders typically will not have time to entertain all your queries. Mortgage broker companies such as Cornerstone Capital, on the other hand, can be hands-on and guide you with every step of the loan application process.

  • Opportunities for Bad Credit

    Bergen County Mortgage brokers can allow you to get a home loan even if you’re not in excellent financial shape. While a high credit score is usually an assurance for loan approvals, a lousy credit shouldn’t stop you from applying for a home loan. Your brokers may know lenders that can accommodate your application despite your credit standing.

CONS:


  • High Commission Rates

    Commission income is what keeps mortgage brokers in the business. However, some brokers charge borrowers unreasonable and excessive commission fees on top of the loan amount.

    Commission fees are usually shouldered by either the lender or the borrower. To give you an idea, brokers typically get 0.5% to 2.75% of the loan amount. Regardless of who pays the commission, your broker cannot charge beyond the 3% limit under Dodd-Frank Wall Street Reform and Consumer Protection Act.

  • Loan Closing Delays

    Because Bergen County mortgage brokers are mere intermediaries for the loan application, expect that there will be delays in closing the loan application. However, seasoned mortgage broker companies such as Cornerstone Capital know plenty of home lenders, making the closing of a mortgage loan in Bergen County even more manageable.

  • Poor Mortgage Deals

    A mortgage broker should provide you access to better home loan deals. However, if your broker is only after the commission, chances are he’ll favor a lender over the other. Supporting a single lender defeats the purpose of a broker.

    To address the issue of not getting the best mortgage rates from your broker, we suggest considering client reviews on your mortgage broker before doing business with them.

Conclusion


When looking for promising home lenders and mortgage brokers Bergen County has to offer, it doesn’t hurt to do some window shopping. Remember, the key to your new home is just around the corner if you’re smart and wise about your choices.