Obtaining funding for the purchase of a new home can feel complicated and overwhelming when you’re unfamiliar with the process. There are people out there who can help, and it’s essential to know who to contact and how they can best help you. Understanding the roles of mortgage brokers, lenders, and loan officers before starting the pre-approval and mortgage lending process will be beneficial in the long run.
Mortgage Broker
A mortgage broker might ask questions such as your credit score and desired interest rate and help you fill out mortgage applications. Some brokers might help you calculate and compare the long-term costs associated with different loan types and terms. However, they will not approve your loan application or lend any money. Mortgage Brokers are there to assist in the search for the best lender based on your credit and income profile. They do the work for you, which could potentially save you time and money.
Mortgage Lender
A lender is “an individual, a public or private group, or a financial institution that makes funds available to a person or business with the expectation that the funds will be repaid.” Lenders put up the money to provide financial support for a borrower to purchase something that the borrower does not have cash for upfront, like a home. A bank or credit union will serve as a mortgage lender in most cases. It’s best to shop around for the best lender rather than choosing the first option available. A mortgage broker can help you find the best lender. Websites like Bankrate.com and Nerdwallet.com can compare rates to help you find the best available options. Be careful with websites that ask for your phone number and email address upfront. They are likely to sell your information.
Loan Officer
Loan officers work for their specific financial institution and only offer loans and mortgage rates from that institution. They will not compare the rates of other lenders. Loan officers know the banking industry’s rules and how to apply the rules to each loan application. This person will help you gather all the necessary documents and proof required to qualify for the loan. They serve as advocates and educators for borrowers. Keep in mind that their pay is determined by successfully closing on your loan.
Mortgage brokers, lenders, and loan officers all have the goal of helping people obtain real estate financing. They all go about it differently. It’s best to interview multiple people and go with someone you trust and with whom you feel comfortable. Financing a home is a long-term commitment. Having a well-established relationship will be beneficial should you have questions and concerns.
If you need help navigating the world of buying a home, give me a call at (830) 305-5248, or email me at krista@bloomrealtytx.com. I will be happy to answer any other questions you may have! I am always here to help guide you through the real estate process.
