A MORTGAGE BROKER OR MORTGAGE BANKER?

When dealing with home loans, should you go to a mortgage broker or mortgage banker? Really, that decision is up to you.

Over the past 10 years, mortgage brokers and mortgage bankers have become the primary originators of home loans. As a result, home loans are more widely available than ever before.

Mortgage bankers produce home loans with their own funds, which are often borrowed. Then, they unually sell these loans in the secondary mortgage market to investors. However, borrowers usually don't know their mortgages are sold because the mortgage banker almost always continues to service the loan.

Mortgage brokers are the middlemen between the lenders and borrowers. Instead of loaning their own funds, they have contacts with dozens of lenders. They study borrower loan applications in order to match the borrower with the best available mortgage terms.

Banks and S&Ls still make direct loans to borrowers, but many prefer to begin loans through mortgage brokers, who assemble the loan packages at lower costs than direct lenders. In fact, borrowing through a mortgage broker usually costs no more than going directly to the lender.

When deciding whether to use a mortgage banker or a broker, compare their best mortgage offerings. If someone recommends you to an experienced and honest mortgage broker, you're in luck. Even if your credit is less than perfect and getting a loan seems imposible, they can often arrange it.

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