Shopping for a mortgage: banks or mortgage broker
Hey everybody, John Herman, PropertyUp, I’m going to make a video today about the difference between big bank’s preapproval or a mortgage company’s preapproval.
So, today I’m sitting at an open house and one of the buyers that came in was not preapproved and they said, “well, what do I do next? How do I get a preapproval?”
So I started to explain the process and they asked, “Is there another place we could get a preapproval from?” So that’s where this whole video came from.
So basically you can get your preapproval from anywhere you want to get it from.
You can get it from a big bank, or you can get it from a mortgage broker.
Now, a big bank, I understand is going to be convenient if you are already banking at that bank, and they have your mortgage and you’re taking care of everything in one spot.
That’s great, but I will tell you that if you do shop around for a good mortgage broker you’ll find a mortgage broker has a lot more programs available to them than a big bank would.
Traditionally what I have seen from the buyers that I’ve worked with is that mortgage brokers will offer at least 1/4% lower interest rate than the big banks have available to them.
Also, each mortgage broker doesn’t have the same program as every other mortgage broker. So you could shop around with different mortgage brokers and they might have different programs that fit your needs even more and better interest rates.
So it all depends on your current situation. For instance, the mortgage broker may offer a loan that requires a lower down payment that the big banks don’t offer and vice versa. The big banks may have some type of loan that the mortgage broker doesn’t offer. Traditionally, however, from what I’ve seen, mortgage brokers are definitely a better deal when you’re shopping around for interest rates.
So I just wanted to give you my 411 on that and hopefully it helps.