Find local banks and mortgage brokers and compare services and rates.

If you're buying a home, you will likely need a loan (or mortgage), but did you know there are differences between mortgage brokers and bank loan officers

The loan officers at a bank, or other lending institution are employees who work for the bank to sell and process mortgages and other loans originated at the bank.  They often have many of loans types to draw from, but all loans originate from the lending institution for which they work.

The loan officer attempts to find a home loan from the banks portfolio that suits your needs.  If your credit is approved, the officer moves forward to process the loan.

Mortgage brokers are professionals who are paid a fee to bring together lenders and borrowers.  They typically work with many different lenders, not as employees, but as freelance agents.  They evaluate home buyers, analyzing each individual's credit situation to determine which lender or program is the best fit for that person's needs. The broker submits the home buyer's application to one or more lenders, and works with the chosen lender until the loan closes.  A good mortgage broker can find a lender for just about any type of credit.

The mortgage broker is earning a fee for the transaction and the better deal they achieve for a lender, the more they are paid.  That doesn't necessarily mean the loan will cost you more but be sure to shop around to make sure the terms are reasonable.

A local or online mortgage broker may find you a out of town lender.  An online bank will likely not have a local office where employees can help you face to face.  Additionally some out of town lenders may not be familiar with local customs that pertain to closing a transaction or understand common classifications and terms used by local appraisers. These and other issues may cause significant slow-downs in loans made by an out of town lender working with a mortgage broker.

Using a local bank can sometimes be a plus.  They generally understand the specifics of local properties, but an out of town lender who doesn't will delay closing until questions are answered.  Mortgage brokers can often find  lenders who will make loans that a bank won't--problem credit is one example.  Loans for unique or commercial properties might be easier to secure through a mortgage broker.

Make your choice of a lender based on the best loan terms you can find.  Ask prospective lenders questions about expected time-frame of closing your deal.  Ask your real estate agent friends who have recently bought a home for lender and broker referrals.

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