Perhaps the greatest advantage to working with the Loan Officers of StrongBox Home Loans is that we’re all brokers. Representative of roughly only 15-20% of the mortgage industry, brokers tend to be more competitive than most banks and major lending houses. As a matter of fact, many of our referrals COME from banks. If you decide to shop around and we go head-to-head against another lender that isn’t a broker, we win every time. Every. Time. That’s because we invest the time to find the best loans and – since our overhead is lower and we don’t have to contend with the many layers of management that you’ll find at most banks and lending houses – we can get you to the closing table and into your new home faster. We prove a great lending partner to homebuyers, homeowners and real estate agents alike. Curious about some of the differences between banks, other lending houses, and brokers? Check out the chart below for some of the important differences!
banks & large mortgage lenders
The banks & large mortgage lenders originate, process, underwrite, close, fund, and sell their mortgages in the open market. Almost all mortgage servicing is sold at some point during the life of the loan. In fact, most mortgage documents signed at closing disclose that they sell 95% of their servicing regardless of who originates it.
The broker acts as a middle man & originates and processes the loan while the lender underwrites, closes, funds, and sells the mortgage. The process is the same, but instead of one company touching the loan, there are two.
With loans you have investor guidelines from Fannie Mae, Freddie Mac, FHA, VA, and USDA. On top of that many Banks and Lenders have their own requirements making it even more difficult to be approved for a loan. These overlays may include higher credit score requirements, lower debt to income thresholds, and higher reserve requirements for example.
Brokers have options! They can choose who has the easiest underwriting....fastest service. They choose the lender who has the strongest appetite for your credit profile and who is willing to compete for your business on any given day.
Lenders have to weigh the risk of each loan heavier than brokers, therefore when it comes to a self-employed borrower they have to qualify the usable income differently. For borrowers that have a lot of money in the bank with no verifiable income or those looking to reduce their taxable liability you will find that a lender can only be so creative.
Brokers have more flexibility when it comes to self-employed borrowers. They are willing to take the most aggressive approach to get your mortgage closed and can be creative. For example, they can do no verification loans, loans for self-employed and investors, and those who want to take advantage of the tax code.
Lenders are typically larger corporations with recognizable brand names but sometimes bigger isn’t always better. Many times these large corporations hold multiple hats which means they aren’t able to zone in and focus on one specality.
Brokers may be a smaller organization, but that means they are able to run much more cost-effectively & efficiently and can pass on savings to clients. They are specialists in mortgages, giving you better customer service and communication throughout the process.
Limited Number of Conservative Products
Broader, much more diverse Product Selection
Since a lender only has their products, there is only one place they can shop the rate- within themselves. If a lender cannot beat or match a rate with a competitor they are at a dead end.
A broker has access to a pricing engine that stack ranks hundreds of lenders nationwide to search for the best rate and cost. Competition drives down rates and costs.
You should shop your mortgage as aggressively as you like. Ask for recommendations and check online reviews. Make sure you measure rates and costs along with the ability of the mortgage lender or broker to close on time and provide a high level of service. But the truth is there is a good chance there is a broker nearby that can provide lower rates and costs, faster and more efficient service, and a broader product mix.