Mortgage broker vs. bank

You can get a mortgage from a bank, a credit union, a direct lender or a mortgage broker. A broker is not a lender. A broker works for you, compares loan options from multiple lenders, and helps you through the process.

One application, many lenders

A bank or credit union lends its own money and offers its own loan programs. A mortgage broker works with a network of wholesale lenders. One application lets the broker compare programs, rates and fees across them to find options that fit your situation. This is especially useful when your situation is not simple, such as self-employment, an investment property or a commercial loan.

How brokers are paid

Brokers are paid either by you or by the lender, but not both. Federal rules require that the compensation be disclosed. It appears on your Loan Estimate, so you can see exactly what the loan costs. Banks are paid too, through the interest rate and fees on their loans, so ask any lender how they are compensated.

Comparing offers

Whichever route you choose, compare the same things on each Loan Estimate:

• The interest rate and the APR.
• Lender fees, including origination and points.
• Third-party fees, which are often similar between lenders.
• Cash needed to close and the monthly payment.
• Any prepayment penalty or special conditions.

A lower rate with higher fees is not always cheaper, so compare the total cost for how long you expect to keep the loan.

When each option fits

A bank or credit union can fit well if you already have a relationship, or if their program matches your needs. A broker can fit well if you want to compare several lenders with one application, or if your loan is more specialized. Many buyers get a quote from both before deciding.

Licensing

In Florida, mortgage brokers must be licensed by the Office of Financial Regulation, and you can check any mortgage company or loan officer at NMLS Consumer Access (nmlsconsumeraccess.org). Simp Mortgage LLC is licensed as a Mortgage Broker Business, NMLS ID 2695475.