When it comes to finding a lender for your mortgage, the choices are no longer limited to just banks. Now there are mortgage builders, home builders, and Internet lenders to choose from as well. Each lender has benefits and drawbacks and have their own rates that people need to compare in order to get the best deal.
The advantages of using banks is that they are regulated by both state and federal agencies. Plus, your relationship with the bank could give you a lower rate, especially is you have a checking and savings account with them. In addition, you get face-to-face time since there are physical branches that you can go to.
The disadvantages of banks are that they only offer the products that the bank has. In addition, they may not offer the lower rate available, and they may lack negotiation when it comes to publicized rates offered by other lenders.
Mortgage Brokers have access to a number of lenders, which mean that they access to a wide range of rates that are available to you. In addition, if the loan falls through, they have quick access to another lender for you to try which can save you time.
The disadvantages to using a Mortgage Broker is that they work for the lender, therefore, they may only have the lenders interest in mind when giving rates. Plus they can tack on fees and raise rates to anyone if they deem it appropriate since they are not regulated by any agency. However, they usually can offer the best rates since they are up-to-date on the latest rates being offered.
Home builders offer a distinct advantage to first time buyers as it is easier for them to qualify, in addition the title of the home is not considered real estate until the building is completed, which means that the buyer does not pay payments until the property is finished. The disadvantage is that home builders usually favor one lender over another which can make it harder for you to go with the lender of your choice.
Internet Lenders allow the advantage of shopping for rates from the comfort of their own home, which can be very convenient. However, the disadvantage is that the borrower will have a harder time of understanding the terms of lending since they do not have a person walking them through the process. Finding a loan through the Internet has grown in popularity due to its ease of use and the fact that it can save you money since everything is automated