Just as everything in this world what goes to high must come down and what goes to low must come up. Over the next several months, 6 to 24, we will begin to see a rise in real estate values yet again. I have personally seen this up and down swing three times in my life. Yes this is a bad one as many people are out of work and even worse loosing their homes. I do agree this is a very bad but it will to pass and the run up will be on again.
In the current market environment we find ourselves the banks are not lending money period. This credit crunch will prove to be some what artificial once it has passed. I relies that is difficult to swallow given the current conditions but just wait and see.
If you are in the market for a new mortgage weather it is to rework your current mortgage or purchase a home then a Broker will have many more options than a bank.
I was recently ask, since I bank at Wells Fargo, can’t the bank get me a better rate than what a Broker can offer?
This is a great question and the answer doesn’t make intuitive sense so it’s hard to come to without assistance. People are amazed when I tell them I can get them a lower rate on the same bank loan than the bank branch where they bank directly can.
· How can this be?
· That doesn’t make sense?
· Why would the bank let this happen?
Well, the local branch office of any large bank they are there to server the public in that neighborhood. They are called a “Retail” branch for that bank. The fact is that most banks only do 10-15% of their total loan originations from their branch offices. Mortgage brokers like me do the 85% – 90% of their loan origination. So if the bank allows their retail branches to offer lower rates to their clients than what brokers can offer, then we will stop originating loans for their bank since the retail branches can out price us every time. The banks would kill their most productive portion of their distribution network for loan origination by at least 85%. Not a good business move in any industry. This can be found for most large banks or mortgage banks that offer mortgage financing like Wells Fargo, Countrywide, Citibank, etc…
Mortgage Brokers can shop many banks which is another great advantage for clients like you. If you go into Washington Mutual, they can only offer you their loan programs and that is it. I have access to another seventy banks or lending institutions that I can shop for you in order to get you the best value for your mortgage financing. This is a huge advantage if you have specific needs when qualifying for a mortgage. As different lending institutions get more aggressive with their pricing, my clients get to jump on to those loan programs and enjoy the extra value.
I hope this helps you understand the difference between a bank and a broker. If you should have any questions you can get information on many loan programs at firstname.lastname@example.org. Here you can speak directly to a loan officer and get accurate answers to your questions.