San Diego Mortgage and Home Buying Tips
If you need tips and advice on San Diego home loans and home buying then you've come to the right place!
San Diego Mortgage Lenders vs. Brokers
Summary: An explanation of the differences between a San Diego mortgage lender and a mortgage broker, and how to choose the right one for your home buying needs.
Buying a home in San Diego can be an exciting and even nervewracking process — especially if you are new to the home buying process. The mortgage process, however, tends to overwhelm a lot of first-time San Diego home buyers.
A common point of confusion among home buyers is whether to use a primary lender or a mortgage broker when obtaining a loan. But simply by understanding the differences between the two types of San Diego mortgage professionals, you’ll be better able to choose the right one.
Difference Between Primary Lenders and Mortgage Brokers
When you sit down with a mortgage professional to discuss lending options, it’s important to know whether he or she represents the lending institution directly (a primary lender) or represents multiple lending institutions (a mortgage broker).
So there we have the key difference between a San Diego mortgage lender and mortgage broker:
- The primary lender represents a single lending institution
- The mortgage broker, on the other hand, can represent several lending institutions at the same time.
A primary mortgage lender can place you in any of the mortgage programs offered by that particular bank, as long as you qualify for the program. Mortgage brokers can do the same thing, but because they represent multiple lenders you may have more options for loan packages.
San Diego mortgage brokers charge fees for their services. So the first thing home buyers will ask is, “What are the broker’s fees, and who pays them?” It’s important to answer these questions up front, especially when you consider that broker fees are typically expressed as points — and each point equals one percent of the loan amount. That can be a sizable chunk of money for a home buyer to pay.
So, before making a decision on whether or not to use a San Diego mortgage broker you should find out who pays the brokers fees. In many cases the fees are paid directly by the San Diego lending institution that the broker “hands” the deal to. In this case, the home buyer would not have to pay any broker fees. In other cases, however, the home buyer will have to pay the mortgage broker’s fees.
Here’s another point to consider. If you have bad credit, or if it’s difficult to prove your full income, you might consider working with a mortgage broker (as opposed to going straight to a San Diego mortgage lender for a loan). Because brokers work with multiple lending institutions, they will normally have more options at their disposal.
Choosing Your San Diego Mortgage Professional
Regardless of whether you choose to work with a San Diego mortgage lender or a broker, be sure you feel comfortable with them and confident in their abilities to help you. You should also feel free to ask questions about your mortgage loan options.
After all, buying a home will likely be one of the largest financial moves of your entire life. So you need to be comfortable with all of the players.
Related article on broker leads and related mortgage topics.