• Phone: (714) 420-1997
    Email: vlong@uamco.com

  • Which Type of Mortgage Lender is Best for You?

    July 18, 2016
  • Which Type of Mortgage Lender is Best for YouWhen you are buying a home or getting ready to refinance your mortgage, selecting a lender can be confusing.  It might seem like the best option to run down to your bank or credit union, but is that really the smartest decision?  Before you get started, you need to understand a few basics regarding banks, credit unions, and brokers.

    Which type of lender is right for you? Here are a few things to consider:

    Pros and Cons of Banks and Credit Unions

    When you are working with a bank or credit union, it means that the financial institution will work with your application, determine if you are qualified for the loan, and then provide the money that you need. In most situations, the loan will then be sold on the secondary market.

    This possibly gives you the opportunity to work with a company that you are already familiar with, such as a credit union or bank where you are currently doing business.  You may not have to worry about shopping around, but it might mean that you could potentially miss out on a better deal for your loan.

    Another disadvantage is that you have limited choices since these lenders will only offer programs that are available within their company. You have to do the work to comparison shop if you want to look at other financing offers.

    Using a Mortgage Broker to Obtain Your Loan

    A mortgage broker is a loan originator that has the ability to work with a number of financial institutions who offer many different types of mortgage products. When you work with a mortgage broker, you will have a professional who will look for the best mortgage solutions that meet your individual needs. The goal is to find the best price and good terms so that you can get the mortgage that will work right for your financial situation.

    When you have been approved for a loan through a mortgage broker, you will then work directly with that broker rather than with the bank.  This will often result in better communication throughout the process. The biggest benefit is that you will have the option to compare many different types of financial products to find the solution that is best for you. You have a one-stop shop where you will be able to see a wide range of programs that are available.

    One misconception is that working with a broker is more expensive.  In some cases, this may actually be true as brokers may add fees on top of what the bank charges.  However, if you choose your broker carefully and work with a reputable company, you may find that working with a broker is actually cheaper than working with your bank or credit union because they can often find you less expensive financing options.

    If you have additional questions about this or any other aspect of the mortgage process, feel free to contact me at (714) 420-1997 and I’d be happy to answer your questions.