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San Diego Mortgage Lenders

Nov 7

The pros and negatives of mortgage brokers vs. bankers

Are you looking for an agent to help you purchase a house or renew the one you already have?

Which one is the best choice for mortgages? Brokers or banks?

The primary distinction is that a mortgage officer solely promotes the products that their institution offers. However, a mortgage broker is an intermediary that is in contact with many lenders and is compensated by the lenders by referring business. The Financial Services Commission regulates mortgage brokers in San Diego and requires them to possess a license.


While most homeowners still have traditional mortgage lenders, however, the primary reason why consumers hire a broker is to find a good deal or get the lowest rate. Because they are able to work with a variety of lenders, like major banks, trust, and insurance firms, mortgage brokers are able to secure better rates.


According to CMHC, The CMHC found that 39 percent of homeowners hired a broker to plan their mortgages in 2017, up from 33 percent in 2016. In the process of seeking a home loan, homeowners consult an average of 4.5 mortgage professionals, with 2.4 lenders and 2.1 mortgage brokers. The majority of San Diego mortgage lenders brokers clients are first-time buyers, which is ascribed to their lack of respect for major institutions compared to their parents.


These are just a few of the advantages that accrue to both banks and brokers:



  • It could be that a customer relationship exists with the employees of the bank.

  • A loan officer at a bank may not have specific knowledge about mortgages however they will be able to provide a wider understanding of financial markets and also provide details about different financial products.

  • The bank may be able to expedite approval by learning about the clients' investments, credit history, account balances, and credit card information.

  • It gives the peace of mind the bank is large and stable enough to weather financial storms. Banks must follow federal guidelines for underwriting.


Mortgage brokers


  • Clients complete a single application and don't have to travel around and obtain estimates from several lenders.

  • They typically get lower rates than central banks.

  • The services and products of different lenders are all well-known to mortgage experts.

  • If you are struggling to get accepted by a bank, like self-employed individuals and those with bad credit ratings, might be able to obtain a mortgage through them.

  • If you're working with either a mortgage broker or bank, the down payments guidelines are identical. A down payment of 5% is required for homes less than 500 000. If the purchase price is between $500,000 and $999999 you'll need 5% of the first $500,000 and 10% for anything over $500,000. If you're buying a home with a value of $1 million or more it will require 20% down. Mortgage loan insurance, which is provided by CMHC is mandatory for all down payments of less than 20 percent.

While the federal government does not control credit unions or smaller lenders, they are forced to comply with certain underwriting rules. A lot of smaller lenders, also known as "monolines" specializing in mortgages, sell their portfolios to banks with more strict restrictions. Homebuyers have more room to breathe because of the current cold San Diego property market and GTA. Potential buyers are less in a hurry.


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