When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
The Pros and Cons of Lee’s Summit Mortgage Brokers
There is a vast difference between working with Lee’s Summit mortgage brokers and lenders. Shopping for a home loan can be overwhelming, so it’s important to have someone knowledgeable by your side. Before you decide which kind of professional to hire, you will need to understand the benefits and drawbacks of working with a mortgage broker.
Lee’s Summit mortgage brokers process loans and help homebuyers apply for financing, but they are not actually lenders. Their job is to act as an agent, or middleman, who brings the borrower and the lending company together. Pricing can be just as competitive with a mortgage banker, as long as the broker does not take too much compensation.
Pros of Lee’s Summit mortgage brokers
- They will do the legwork for you, comparing wholesale interest rates from a large number of banks and lenders.
- They are required to disclose the yield-spread premium, or their compensation for originating the loan.
- They generally have access to a larger variety of mortgage options.
- They follow trends, know what products are available and are aware of which institutions might be offering special discounts.
Cons of Lee’s Summit mortgage brokers
- Do not guarantee good faith estimates.
- Some individuals lack the experience and training to complete a deal.
- May charge borrowers substantial fees for their services.
- Brokers secure your mortgage for a fee and the better deal they make with the lender, the more they are paid.
- Sometimes known for luring customers in with low interest rates, and then adding origination points and fees to generate additional income from borrowers.
- Realtors usually prefer to work with direct lenders, who have full control over a loan.
Keep in mind, any third party involvement can slow down the business process. Having too many hands in the pot can complicate any situation. If you use a broker, your application may be handed off to multiple people before being approved for a loan. This can cause delays in the approval process and a decline in communication with the broker.
If you would rather work directly with the person who will be handling your financing, choosing a lender is the best option for you. Many customers appreciate their ability to efficiently handle and resolve issues that may arise. Contrary to popular belief, many lending institutions offer a wide range of home loans. Private relationship-based companies may have different or better programs than independent agents. Many of these firms also typically close loans faster and on time.
Want to learn more about the difference between lenders and Lee’s Summit mortgage brokers? Contact a Cornerstone Mortgage, Inc. representative today toll-free at: 816-525-9910. If speed, reliability and competitive rates are important to you when applying for a home loan, you are in the right place. Their loan officers have over 15+ years of experience in the mortgage industry and are happy to assist you with any of your home buying needs.The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.