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San Diego Mortgage Lenders

Nov 7

The pros and negatives of mortgage brokers vs. bankers

Are you looking for a mortgage professional to help you purchase an investment property or renew the one you have?

Which one is more suitable for mortgages: brokers or banks?

The most important distinction is that a bank mortgage representative only promotes the products offered by their institution. A mortgage broker, on the other hand, is an intermediary who works with many lenders. They're compensated by the lenders to refer customers. Mortgage brokers in San Diego are regulated by the Financial Services Commission and must have a license.


Even though the majority of homeowners use traditional banks for mortgages, the main reason consumers seek out a broker is to discover a bargain or get the greatest rate. Mortgage brokers have access to greater rates due to their interactions with numerous lenders, which include major banks as well as local lenders' insurance and trust companies as well as private funds.


According to CMHC in 2017 39% of homeowners used an agent to negotiate their mortgage. This is an increase from 33 percent in 2016. Consumers talk to an average of 4.5 mortgage experts when searching for the best mortgage loan. This includes 2.4 lenders and 2.1 mortgage brokers. A majority of San Diego mortgage brokers' clients are first-time buyers, which he attributes in part to their lack of respect for major institutions in comparison with their parents.


The following are some of the advantages that accrue to both banks and brokers:



  • It is possible that a client relationship exists with the bank and its employees.

  • Although they may not be experts in mortgages, bank loan officers can provide more general financial advice and provide information on various financial products.

  • The bank could be able to improve approval speed by having knowledge about the client's credit history, account balances, and credit card history.

  • This gives you security knowing that your institution is stable and significant enough to withstand financial turmoil. Banks must adhere to federal regulations for underwriting.


Mortgage brokers


  • Clients complete a single application and do not have to visit and request estimates from multiple lenders.

  • They typically get lower rates than central banks.

  • The products and services offered by various lenders are well-known to mortgage experts.

  • Some banks will not take self-employed people or those with poor credit that are having trouble getting a mortgage.

  • No matter if you're an institution like a bank or mortgage broker, the down payment guidelines are the same: 5percent down payment for homes worth less than $500,000. If the price of purchase is between $500,000 and $999999, you'll require 5% for the first $500,000, and 10% for anything over $500,000. A down payment of 20% is required when buying a home worth $1 million or more. All down payments below 20 percent are subject to mortgage loan insurance, which is provided by CMHC.

While the federal government doesn't control credit unions or smaller lenders, they are forced to adhere to certain underwriting standards. Smaller lenders (or "monolines") that specialize in mortgages offer their portfolios at larger banks with more strict controls. Homebuyers are able to breathe in the current colder San Diego property market and GTA. Prospective buyers aren't as in a hurry.


Dennis Sakofsky C2 Financial Corp
2001 Peridot Court, Carlsbad, CA 92009
(619) 391-3707!