For instance, there is no doubt that quicken loans is one of the biggest mortgage lenders in America. True, they are probably the #1 online mortgage lender based on their recent pay per click ads on Google. Commonly, this increases their cost of acquisition on loans originated and limits their ability to offer rates and closing costs that are comparable to a low priced local mortgage broker.
The truth is, no one is saving the manatees when it comes to originating mortgage loans. Everybody is in it to make MONEY. As a consumer, it is your responsibility to call around and shop for the best mortgage rates. Typically, smaller local mortgage brokers will have better mortgage rates and lower closing cost options compared to big national lenders/banks.
Choosing a Local Mortgage Broker over a large lender is better for two simple reasons:
- Small mortgage brokers have lower overhead with access to wholesale mortgage rates often through the same lenders/banks that would quote you a higher rate. You can think of it as Costco v Publix. Neither one are bad. It just depends on how much money you want to save.
- Mortgage brokers have access to more loan products compared to banks. For instance, if you are looking for a HARP loan and call a bank, that bank may have a cap on loan-to-value. However, a mortgage broker has access to not just one bank program but hundreds of different bank avenues with a variety of mortgage options that may not have restrictions on loan-to-values.