Where to get a mortgage: Bank, Direct Mortgage Lender or Mortgage Broker?

[lmargilaj]

Banker, Broker, or Direct Lender ...
Who’s Best?

After all, all they do is loans and they work for their client,
right?

So, you’re looking to get a mortgage but you don’t want to be another statistic and
fall prey to an unscrupulous mortgage loan officer. You want to make sure you get solid
financial advice and your largest investment is protected.
Since the beginning of the mortgage fiasco in 2007 many loan officers have left
the business and many lenders and banks have closed their doors.
Now, you want to get a loan but you don’t know whom or where to turn to.
After all, all mortgage loan officers are the same, aren’t they? Their job is to work for the
client and all they do is loans. Right?
Not quite!
Traditionally, when people needed to get a mortgage they went to their local
bank. But over the years, that trend has changed dramatically.
Today,

mortgage brokers control 65% of the market.
Why is this so?
First, let me explain why banks lost majority of the mortgage business.
As you may know, banks are conservative. They pick and choose which borrowers they
want to lend money to after making sure those loans will yield juicy returns on their
investment.
Many banks now give their employees titles like “Personal Banker” or
“Relationship Banker” or something like that. They want their customers to think that this
person is assigned to them and they can assist them with all of their banking needs. After
all, when you walk into your local bank, you can actually sit down with someone and
discuss your needs or concerns.
But, what sounds like a perfectly good concept has some major flaws.
Here they are:

1)

“Jack of all trades, and master of none”

The loan officer at your local bank is most likely offering an array of other services.
They’re trained to and assist their customers with opening and servicing new accounts
(checking, savings).
Then, they want to sell you Certificate of Deposits (CDs).
They also offer life insurance and securities products. And of course, they do mortgages
as well. They are ‘specialists’ in all of these areas while they make a salary plus a very
small commission on each product they sell. So, whether you do your loan with them or
not, they will get paid.
2)

The represent the bank, not you!

As I mentioned above, they get paid based on the number of hours they put in, not based
on their performance. So, their allegiance lies with the party that is signing their
check…the bank.
And, since the bank only does loans that are most beneficial to them, you are not likely to
get the best loan program available.
Look at it this way…
How many rich people do you know that get their loans at their local bank?
How many rich people do you know that get financial advice and buy securities programs
at their local bank?
I would guess very few…if none. You see banks are what I call ‘generalists’ not
‘specialists’.
They cater to the masses that are not very financially savvy.
It is this personal approach keeps banks in business, not their products or advice.
In my opinion, banks serve only one purpose and that is to make it easier for you to pay
your bills.
Maybe, now you’re beginning to realize that going with a banker is probably not
the best way to get a mortgage loan and you should be dealing with someone that
specializes in ‘mortgage lending’.
Let’s compare ‘direct lenders’ and ‘mortgage brokers’.

Direct lenders

They are much like banks in that their loan officers typically get a minimum wage
salary and a small commission on each loan they close.
Commissions typically range from $100-$300 per closed loan. Since they have to
make a living, loan officers try to close as many loans as possible. They’re like the ‘fast
food restaurants’ of the mortgage industry. Get in, get fed, get out and make room for the
next customer.
Direct lenders lend their own money and once their pipeline starts to get full they
sell package their loans and sell them on Wall Street. To their defense, all they do is
mortgages. But they are limited to the types of loans they provide. Typically, just like
banks, they have several different loan programs to offer you.
Even if they give you the best program they have, that particular program may be
inferior compared to the rest of the programs out there since their lending model is
designed to advance their bottom line…not yours.

Mortgage Broker

A mortgage broker has the ability to do business with direct lender and large and
small banks. They serve as the middleman between you, the client, and the lending
source.
They work for the borrower, and they don’t get paid until the loan closes. They
recommend the lender that fits your financial situation best.

Robert G. Allen

, the all time best selling author financial books and a multimillionaire
real estate investor said

‘Never get a mortgage loan from
someone who gets paid on salary”

He hints that the best mortgage loan officers are those that get paid on
commission because their paycheck depends on their performance. They’re wired a little
bit differently from the rest of the mortgage loan professionals. Instead of getting a job
with a company that pays a salary, they opt to work for free for their client until the loan
closes. If they fall short of what they promised to their client, then the client can walk
away from the deal and the loan officer who works on commission is left with nothing.
It is in their best interest to get the best possible loan program for their client.
In my eight years of experience as a mortgage planner, I have found that the best
deals for my clients come from small lenders most people have never heard of, not from
banks or direct lenders.
These small and unknown lenders typically have lower overhead and are able to pass
down the savings to the client in return for more business.
The next challenge lies in finding the right mortgage planner who understands the
financial markets and your best interest at heart.
Please feel free to forward this report to friends and family members who want unbiased
mortgage and financial advice.
Regards,
Leo Margilaj –

Mortgage Planner

First Mortgage Corporation

www.AskLeoM.blogspot.com