The weather is getting cold, but the real estate market is still red hot, especially in Boston. Mortgage rates are at historic lows and many are using this opportunity to buy a new house or to refinance their mortgage. Today’s real estate market offers you plenty of choices for where to get a home loan. You can go to your bank. You can also turn to one of the online lending sites and search for a loan without ever leaving your house. Finally, you have the option of working with an independent mortgage broker to help you get the funding you need for your dream home. With all of these options, it can be a bit overwhelming and difficult to figure out which is best for your needs. However, if you compare the pros and cons of all your lending options, it’s clear that nothing beats an independent mortgage broker.  

The Pros and Cons of Getting a Mortgage Through a Bank

Going to your own bank to get a mortgage is one of the first options that many people think about. It makes sense. First of all, you have familiarity with your bank. Many families have relationships with their banks that go back many years. This builds a level of trust and comfort that makes you bank seem like a perfect fit for also being the place you get your mortgage. Plus, the idea of having all of your banking and lending done by one entity seems like it is convenient.

The downside to going to your bank for your loan is that you don’t have as many choices or flexibility. Banks have rigid lending policies and limited loan products. Typically, banks only want to offer mortgages to individuals with very particular credit scores and have very strict down payment requirements. If you fall outside of their set parameters, then it is difficult to get a loan with them. Furthermore, individual banks only underwrite so many loans as to not overextend themselves. Working with a bank means trying to fit their exact needs as opposed to them working to fit your needs. While banks seem ideal because of the sense of familiarity you have with them, the lack of choices might not work in your favor. 

The Pros and Cons of Getting a Mortgage Through Online Lending Sites

These days, there is almost nothing you cannot do over the internet. This includes looking for a mortgage. Many people are turning to online lending sites to find their home loan. The two main benefits of going through one of these online lending services are choices and convenience.

Going through an online lender for your home loan gives you the benefit of applying to a bunch of lenders all at once. You put in your information into their qualification form and then your information is sent out to a bunch of lenders. This gives you a bunch of different options. If you qualify for a home loan, you will be given a variety of choices of mortgage products that vary in amount and rates. In some ways, you will have the pick of the litter. You are not limited to your family bank. You are not even limited to your city. Instead, you have the opportunity to work with lenders from around the country. 

In addition to having many different lenders and loans to choose from, you do not even have to leave your home. You get access to all of these loan options without even having to get out of your pajamas. 

While the blend of convenience and options has made online lenders a choice for many looking for a new mortgage, there are still downsides. The first downside to going with an online lender is the lack of personalization. Lenders look at you based on the numbers you put in your application. They do not take your whole situation into account. And if you do not meet the lending requirements, you do not have anyone to advocate on your behalf. If you get turned down, then you get turned down. 

Furthermore, you do not get to learn about the loan process nor do you get to learn about how to improve your situation. Online lenders are not there to hold your hand and walk you through the process. They do not explain every detail of the approval process nor the factors that go into a qualification decision. Again, it is a black and white process based entirely on your financial numbers. 

The last downside to going through an online lending site is the flip side to having access to so many lending options. While having many choices is a good thing, the barrage of emails and phone calls can get irritating. The online lending site acts as a clearinghouse for other lenders. They do not write your home loan directly. Instead, your information is passed along to the other lenders. These lenders then contact you directly to try and convince you to go through them for your mortgage. Your voicemail and inbox will be full in no time with lenders reaching out to you.

The Pros and Cons of Getting a Mortgage Through Independent Mortgage Brokers

Independent mortgage brokers offer you the best of all worlds for getting a home loan. You get the personalization and comfort of going through a bank by working with a single professional. You also get the variety of products and lenders available through online lending sites without all of the emails and phone calls. Instead, all offers work directly with your mortgage broker who relays their offers to you. Lots of loan options from a single contact. 

The single biggest benefit of working with an independent mortgage broker is the education provided. Professional mortgage brokers will educate you about the loan process every step of the way. You will never be in the dark about what lenders are looking for and which options work best for your situation. Additionally, they are able to walk you through the process of credit enhancement, so that you can improve your chances for qualification. Even if you are not in a position to get approved for a loan right now, they can educate you on how to set yourself up for the near future. This type of education is what sets working with an independent mortgage broker apart from the other options. 

Final Thoughts

When it comes time for you to try and get qualified for a home loan, you have more options than ever. Between your bank, online lending sites, and independent brokers, you are sure to find a lending process that meets your needs. However, if you are looking to get the benefits of working with a single professional while still getting lots of lending options, there is only one choice. Working with an independent mortgage broker is the way to go. If you are interested in taking advantage of today’s low mortgage rates, then contact us! Whether you are looking to get a loan for a new home or refinance your existing loan, we will walk you through all of your options.