The Difference between Bank Loan Officers & Mortgage Brokers

If you are in the market for a home, whether it is your first, second or tenth you should be aware of what your options are when it comes to mortgages. The two major mortgage options that are available are going directly to your bank and dealing with a bank loan officer or getting your mortgage through a mortgage broker.

Bank Loan Officer:

A bank loan officer works directly for the bank and can offer you numerous different mortgage products. They have different products available depending on your credit history, size of your down payment as well as numerous other factors. The one issue that comes with working with your personal bank's bank loan officer is that they work directly for the bank. Since they work directly for the bank they are very motivated to sell you their products and won't necessarily give you honest advice regarding competitor’s products. The biggest benefit with working directly with a bank loan officer is that you give any paper work directly to them, there is no middle man and is very cut and dry.

Mortgage Brokers:

Mortgage brokers differ from a bank loan officer as they don't work directly for any one bank. They are an external entity who has access to anywhere from a few dozen mortgage products to a few hundred. What this means to you as the client, is that regardless of credit history or down payment they should be able to find some sort of mortgage that you will be approved for.

Mortgage brokers work on commission so they don't get paid unless they provide you a mortgage. In most cases, the bank or financial institution supplying the mortgage pays their commission so there is no direct cost to the client. The down fall to a mortgage broker is they are your liaison between yourself and the bank. If the broker is lazy and slow, getting documents back and forth can be cumbersome and tedious which can be a problem when closing dates are imminent.

So which is better?

This is an age old question, but it really depends what you want to get out of your mortgage. If you want to work directly with the bank and not work through a third party, a bank loan officer might be best for you. However, for those with credit problems or wanting the best deal possible a mortgage broker is definitely what you should go after. Most mortgage brokers are on the ball and get any documents to you as soon as they receive them resulting in a very timely experience similar to working with a bank. I personally have used both and when I bought my first home, I got recommendations and hunted down somebody who I heard was one of the better mortgage brokers in BC and he did a great job.

In conclusion, if you can find a professional, well respected mortgage broker your options for your mortgage will be much greater than going to your local bank. Each option has their benefits but when you weigh out the pros vs. cons, most people will go with a mortgage broker every time.