The Pros and Cons of Using a Bank for Your Next Mortgage

Posted by Gurpreet Ghatehora on Thursday, December 10th, 2015 at 10:58am.

Whether you use a bank or a mortgage broker, a loan to buy your home has to come from somewhere. So unless you’ve recently come into a lot of money, you’ll need to weigh the advantages and disadvantages of each loan vender to figure out which one is best for your specific situation. Here are some of the most common and most important pros and cons of going with the bank for your mortgage over a mortgage broker.


All-In-One: One of the best parts about going with a bank over a mortgage broker is that banks like to encourage through extra features. So if you go through your bank, they may offer you better rates and access to better services simply for having a mortgage through them as well. These could include cuts to bank and credit card fees, and it means you only have to remember one username and password for your money related interactions online.

Lower Interest Rates: Banks are massive institutions and therefore can sometimes offer much more competitive interest rates over smaller shops. In many instances, you can secure better rates through a bank because they have the size to offer such rates. Smaller mortgage brokers can only go so low before they would have to shut up shop to offer such rates, but banks are not only competing with these little guys, they’re competing with other big banks as well. So, if a hit now means more later, a bank can do that. A mortgage broker can’t.

Less Risk: Very rarely do big banks go out of business. But smaller shops unfortunately do, all the time, and that can lead to problems with people using mortgage brokers for their loans. When mortgage brokers go under, the problems that arise are many, and that can mean changing rates or different things happening as your debt is sold off. So if you want stability, look to a bank.


Speed: Where banks are giant, bureaucratic machines, mortgage brokers are often smaller and more personal, so you can often secure a mortgage in less time. Mortgage brokers don’t have to send your mortgage through nearly as many levels of approval, and often have fewer time-consuming policies that can drag out the process. If you want to see the light at the end of the tunnel, the broker may just be your best bet.

Competency: Mortgage brokers have to acquire all kinds of education and accreditation in order to do their jobs, and competition to work in the industry is fierce. That means your mortgage broker employee is probably extremely well-trained and very good at their job. The same cannot be said about banks, who often hire people without the proper education or training, and promote people into the jobs. This isn’t to say banks hire the wrong people, or that education is everything, but it can mean your mortgage broker is better-equipped for the situation.

If you’re getting a mortgage, you’ll need to get someone who can lend you the money. And that may just be a mortgage broker. Always weigh your options against each other, and use this information to make a better decision.

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