In the journey to home ownership, a good place to start is choosing who will hold your hand through the mortgage application process. When it comes to filling out pages and pages of applications regarding your personal, professional and financial history, it’s important to carefully pick the party who will consider your best interest.
Basically, you have two choices: a mortgage banker or a mortgage broker. So, what’s the difference?
“I have been in both seats,” said Caren Hildinger, a certified mortgage planning specialist at Castle & Cook Mortgage in Temple. “I definitely like the flexibility with products and investors, and the control that being a mortgage banker provides. The mortgage banker is the one in control of the transaction from application to closing. The mortgage banker is also liable for the integrity of that loan up to 12 months after the loan closes.”
This means if the purchaser defaults on the loan in the first year, Ms. Hildinger’s company has just bought themselves a house. They will then have to try and sell it themselves. With that in mind, Ms. Hildinger says they will not put someone in a home they can’t afford.
“This makes me look at each deal as though I am lending my own money,” Ms. Hildinger said.
According to the National Association of Mortgage Brokers, their members can offer consumers a wider selection of loan products than mortgage bankers, while allowing the consumer the choice to determine the best deal for them.
The NAMB says the broker simplifies this process for the borrower and the wholesale
lender by conducting research, counseling consumers on their loan package choices, and enabling them to select the right loan for their home buying needs.
Paul Cox, Temple branch manager with Network Funding, has also been on both sides of the mortgage broker/banker fence. He says mortgage bankers have more control because the folks who analyze loans for approval - called underwriters - work “in-house” and are more knowledgeable to problems unique to their locality.
Cox and others said mortgage brokers might be as hard to find as a subprime loan in a few years. The mortgage meltdown has given them a bad name, and government intervention may spell their doom.
But Cox says it’s more about the individual.
“Get a referral from someone who bought a home recently. You want somebody local who can look you in the eye,” said Cox, a 30-year veteran of the mortgage business. “Find a lender you like and trust and get pre-approved.”
On that point, Ms. Hildinger agrees.
“Choosing someone who is reputable, knowledgeable and experienced will help to ensure a positive homebuying and ultimate mortgage experience.”
fafflerbach@temple-telegram.com
