Mortgage Broker vs. Mortgage Lender

What’s the Difference?

If you’re already searching for your dream home, getting pre-approved for a mortgage needs to be your next step. However, it can feel daunting when you’re unsure if you should work directly with mortgage brokers, lenders, or both.

So, how do mortgage brokers and lenders secure you a home loan? Who should you contact to get started? Read more to discover the differences between a mortgage broker vs. lender, and how they work together to find you the best loan option based on the type of home you choose and your unique financial situation.

What is a Mortgage Broker?

Independent mortgage brokers are professionals within your local community who help you secure a home loan based on your needs. They function as your advocate between you and the lender by collecting your application, qualifying documentation, and counseling you on how to strengthen your approval odds.

Once they gain a clear understanding of your eligibility and financial situation, they work with multiple mortgage lenders to find you the best home loan option and interest rate. The more loan products and options you have, the more likely you are to find one that’s perfect for your current situation and future goals.

Once you do, your local mortgage broker sticks by your side to help you close the deal. Oftentimes, this secures you lower monthly payments and gets you into your new home faster.

What is a Mortgage Lender?

Mortgage lenders are financial institutions that offer and underwrite home loans. While there are plenty of mortgage lenders in the industry, each one has approval requirements that must be met before an application is accepted and funds are dispersed.

Lenders verify your ability to repay a loan and overall creditworthiness. Factors like your FICO score, income, and credit history play a major role in loan approval, as well as the interest rates and loan types you may be eligible for. After your borrower application is approved, the mortgage lender loans you the money needed to complete the home purchase (or refinance). They also set the terms, repayment schedule, and interest rate of your mortgage.

How Mortgage Brokers Work with Lenders to Secure Your Dream Loan

While shopping around leads to the best deal, it can be tiring and time-consuming. Working with a mortgage broker allows you to reap the benefits of expert mortgage knowledge and lender relationships without doing any of the legwork. And provides you with access to loan programs and rates you can’t get on your own.

Your mortgage broker will help sort out any additional documents needed for your loan and get them submitted quickly to the right lender. They will also use their expertise to guide the transaction through underwriting and closing — communicating with you, your lender, and your real estate agent throughout the process.

Ultimately, mortgage brokers and lenders work together to help you buy or refinance your home with confidence. You can rest assured that you’ve been presented with the best home loan available for your situation and that your mortgage will be closed quickly.

Ready for a simple, painless home-buying experience? Find your local mortgage broker and get started today!