Shopping for a loan is not unlike the experience shopping for other everyday products. You're looking for a great price at a certain level of service. By shopping around, you eventually find the right business for your needs. In securing a loan, be sure you understand the mortgage broker vs. bank differences.
Mortgage Broker
Brokers account for a higher percentage of loans in the United States. This is because they have the flexibility to shop around for you. It's a lot like hiring someone as your personal shopper and trusting they will come back with the best product for your situation. While banks are beholden to the products and fees that the institution provides, mortgage brokers's can scour the market nationwide in search of the best program. This usually means great savings to you in the form of a lower interest rate.
Obviously, there is a fee for using a broker and it's important to understand what they are charging you. It's wise to check with more than one broker to make sure you are getting a fair shake.
Banks
A bank typically has little flexibility outside of the prodcts they offer. The upside is that you can be more certain you are getting a fair deal as rate and fees are fairly set in stone for everyone. The downside is that it's very hard for a bank to get a better rate than a broker which can mean higher monthly payments for you.
So which is the right choice?
Not to deflect responsibility here, but the choice is a personal one. If you feel more comfortable with the security a bank provides despite the higher rate, that's probably the way you should go. If you prefer a lower rate and are comfortable with the mortgage broker, go with it.
Essentially, you want to do what provides you the easiest night of sleep. Do your due dilligence and you're sure to make the right decision!
