Banks versus Mortgage Brokers

There are pros and cons to both, and sometimes you will have little choice between the two if you have poor credit or a tricky scenario. The majority of homeowners turn to banks when it comes time to get a mortgage lender. They are the most obvious choice, mainly because these services are usually offered at the homeowner's primary banking institution.

However, borrowers who have trouble qualifying, or want to finance tricky deals will often get turned away at banks. So for these people, using a broker is often the next best option.
And pricing with loan brokers can be just as competitive as a bank, so long as the broker doesn't take too much off the top. Wholesale prices are actually much cheaper than retail interest rates you'll get with banks.

Important Information
The banking group made a $4.8 billion profit in the comparable period last year — although direct comparisons are hard due to the acquisition of HBOS.
Daniels added that the decline in property prices had a significant impact on the group’s results, especially given the concentration of assets acquired through the sale of HBOS. National Hard Money Association

Pros of working with a mortgage broker:

• Brokers must disclose the yield-spread premium
• Are easier to get in contact with, less bureaucratic
• They do the legwork for you, comparing the wholesale rates of a large number of banks and lenders
• Wholesale interest rates can be lower than retail interest rates
• Can finance tricky deals

Pros of working directly with a bank:

• Better rates in some cases
• Building off existing relationship
• Ability to add mortgage to existing banking profile and make automatic payments from existing accounts
• Generally more trustworthy

Cons of working with a mortgage broker: Incompetence May overcharge you False promises May not have access to programs with select banks They make mistakes

Cons of working with a bank:

• They make mistakes
• Conservative hard money loan programs
• False promises
• May overcharge you
• Lengthy process, very bureaucratic
• Do not disclose the yield-spread premium