One of the most critical first steps in the homebuying process is to select a lender. You want to find one that you feel comfortable with who can get you a great interest rate and see you through the mortgage process start to finish. Recently I had an experience where a client used a mortgage broker whom I had never dealt with. Let me back up a second here and explain the difference between a mortgage banker and a mortgage broker.

A mortgage banker is the local lender who would handle your entire loan start to finish. They are the ones pulling your credit report, issuing you a pre-approval letter, and handling the entire loan process start to finish. A mortgage broker does all of these duties except once they qualify you and gather all of your info they in a sense become the matchmaker between finding you a lender to handle the loan. They shop around for you and find the best deal out there which at the time may seem like a pretty good deal. The truth of the matter is even though they are finding you a great interest rate and saving you money they also need to get reimbursed in some fashion. My overall point is that although they may save you some money, in the long run it may be more beneficial to have someone local and easy to meet when you have questions or concerns. The savings in my opinion do not outweigh the ability to meet face to face with your mortgage banker.

This leads me to my case in point which was the basis for my opinion. My latest closing consisted of a client choosing a mortgage broker whom a relative had used in the past. Long story short our closing was postponed 2 weeks total and there was more confusion on the lenders part than I have ever encountered. From this point on I thought it valuable to educate my current and future buyers about these two different parties. Please feel free to contact me via email at matt@donnaandcompany.com or cell phone 252-571-9089 should you have any questions about getting started with a local preferred lender!