April 7th, 2018 1:50 PM by Robin Bain
you’re looking for a mortgage you can use a mortgage broker or deal
directly with the bank. Even if you do have a bank you've worked with, you
should consider shopping around anyway—don’t trust your bank is automatically
giving you the best deal.
mind that when you're on your own, comparing rates and closing cost and
terms can be time consuming and complicated. A second opinion could save your
typically offers just a few mortgage options, so in order to find the best
one, you will have to research them each individually.
Pros of Using a Broker
Brokers are mortgage experts . They know the market, follow trends
and know which institutions offer which mortgages products. They'll also know
which lenders are offering discounts or deals.
brokers can save you time. A smart broker can identify the most
appropriate lender for your specific circumstances and know which mortgages
will be most appropriate. They also handle the hassle
of paperwork and interaction with lenders, which can help
relieve stress from the process.
saving of time, work and stress is a big factor for many individuals who
use a mortgage broker. Some brokers develop personal and professional
relationships with lenders, which may accelerate the application process.
Top 10 Reasons to Choose a Mortgage Broker
vs a Banker, Dana Bain
Few people realize there are large
differences when choosing what type of company to get your new mortgage
from. I have worked on both sides of the coin and will recommend to
anyone: Find the best Mortgage Broker you can.
10. Licensing Qualifications –
Brokers have many more laws to abide by and are more heavily licensed than
All Brokers are required to be SAFE Act compliant including being registered
with the Nationwide Mortgage Licensing System. The new licensing
requirements: 20 hours of education, FBI Fingerprint scans, Submission of a
credit report, and a satisfactory score on the Federal and State Licensing
Exam. Once licensed the broker must complete 8 hours of continuing education to
maintain their approved status. Not all Bankers are required to meet the
above guidelines; they can operate under the company licenses without being
9. Full Disclosure – All
Brokers must be completely transparent when disclosing the closing costs to the
borrower, even including their compensation. Bankers Do Not, nor is
it figured into the fees they show you.
We have to show you how much we make during the transaction and our fees are
also considered when calculating whether or not the loan passes the Qualified
Mortgage Rules Fee Cap. As of Jan 10th 2014, there is a 3% cap
to the amount of fees that can be charged on a loan that is equal to or greater
than $100k. Brokers are not allowed to collect compensation from both the
borrower and the lender in the same transaction. We must choose one or
the other, tell the borrower which and then show them the amount we are
collecting. Bankers do not have to disclose their compensation and their
compensation is not figured into the new Qualified Mortgage Rules Fee
Cap. Bankers do not have to let you know their compensation nor is it
regulated under the new federal laws.
8. Ability to Shop – Brokers have
various lenders in their portfolio, so they can effortlessly shop for
you. Bankers cannot shop around and sometimes are unable to even
get your loan approved.
Brokers can pair you with a lender that offers the best rates and costs for
your situation and tailor the loan to meet your needs. Bankers are
usually stuck selling one product to everyone with no option to shop you around
and find you the best fit.
7. Wholesale Vs. Retail – Brokers
sell wholesale, bankers sell retail.
you use a Broker it’s like shopping at Costco or Sam’s club versus going to
Walmart or Target. Everyone knows that the wholesale stores offer better
deals than their retail counterparts.
6. Smaller Company means Better Customer
Service – Brokers have more time to work on a personal level. Bankers
work in volume and not have time to provide personal service.
Most Brokers work for smaller local companies that focus on customer service
instead of margins and bottom lines. Those large Banks sure have big
names, but tend to do loans in volume to make investors and stockholders
happy. A smaller local company is more than likely focusing on building
customer relationships in the community than quarterly profit and loss
5. Faster and Easier Process – A
common misconception today is that a broker has no control over his business,
but must rely on the actual lender to close the loan. We have competitors
time and time again tell our clients if they want the loan closed then they
better choose a banker.
we have more control over our loans because we do all the beginning initial pre
approvals and qualifications. Before we can submit a file to a lender it
must be completely scrubbed by us and been run through Fannie Mae’s Automated
Approval system. This ensures the file is approved and is ready to be
underwritten by the lender. Most lenders hold brokers to high standards
when submitting files that don’t close and a dirty file could cost us our
relationship with that lender. Once in the door approvals take 24-48
hours, then we can start moving a loan toward closing. Fact is; as a
Broker I can get a loan approved and closed before most Bankers can get an
approval. Need a loan closed in just a couple of weeks instead of a
couple of months, then find a mortgage broker to work with.
4. Broker Hours vs Banker Hours – My
hours don’t end when the Bank closes, therefore I am here to help my clients at
As an independent Mortgage Broker I am always available to answer your
questions and take your calls. Most of my business is done actually done
before 9am and after 5pm, which is more convenient to the borrower. When the
bank closes, everybody goes home and you get the answering machine.
3. Knowledge – Brokers are usually
more educated and experienced because of the strict licensing requirements and
Strict licensing requirements and qualifications have weeded out most of the
fly by night Brokers. Those of us who are left have been in the industry
for a number of years and have continued to be successful despite the growing
pangs the industry has gone through since 2010. Most companies won’t hire
anyone without years of experience and a proven track record for success.
Banks are much more willing and likely to hire a newbie because they don’t have
to be licensed. Those few brokers who are left standing are the best of
the best in this industry.
2. Lowest fees – Since Mortgage Broker’s
Compensation is regulated by law we have seen these fees come way down and
benefit the borrowers.
most of my deals I rely on my lender paid compensation to earn my
commission. This means I charge ZERO fees to the borrower, so all they
are left with is Lender, Title and appraisal fees. There are no points or
origination and usually I can offer them a credit toward their closing costs to make them
even lower. The way it works is that each broker company must decide on a
compensation plan with their lender of choice. This is done usually once
a quarter or monthly. So every loan we bring to our lenders have a
predetermined % of compensation we can expect to earn. That
means no matter which rate you choose, I am paid the same amount. No
reason to steer you into a higher rate to make more money. We have our
comp plans fairly low in the market, so when we offer a rate there is usually
money still left over that goes to our clients as a credit to lower their
1. Lowest Rates – Compounding
on the lower fees is of course what rates come at those fees. Since we
are a smaller company with less overhead, we focus on the lowest rates.
The Big Banks have a lot of overhead; buildings, light bills, phone bills,
tons of staff, and the list keeps going. In order to compensate for their
rising costs they have to make it up somewhere, usually from your pocket in the
form of a higher rate. Simply put, I don’t have to pay for all that stuff
so I can give you the best rate and the lowest cost.
License Number Broker MB1498 Licensed by the State of New Hampshire
Banking Department- License Number 5430-MBR Premiere Mortgage Services
Inc. NMLS #1498 is a licensed broker and not a lender.We
arrange but do not make loans. Dana Bain NMLS #18693
Robin Dunbar Bain NMLS #18699
Here is the link to the National Mortgage Licensing System http://www.nmlsconsumeraccess.org
See this great video: https://www.youtube.com/watch?v=sGGDVcQJk6g