When you’re looking at purchasing a home or refinancing a home. You’re going to be presented with different options, different companies and different competitors that are seeking your business. You can break down all of the companies out there into three different categories.
The big banks, the bankers.
There are the brokers.
And there are the mortgage bankers.
All three of them serve different purposes and have different benefits.
The big banks
The Big Banks are like your traditional Starbucks. They are a revolving door of business. They have millions of customers, billions of dollars, and they have some great home loan products. But for a bank, just like your Starbucks vanilla latte, it’s going to be the same no matter where you go. Their ability to be creative on the financing is going to be a little bit tougher.
They’re absolutely amazing at getting high dollar loans through the finish line. That is, of course, if there isn’t anything wonky about the financial picture. Typically, they’re going to have preferred client pricing in which if you have a quarter million, half a million or millions in the bank with them, you’re going to have a different process when trying to finance your loan.
They’re going to have independent underwriters that work for the wealth management team help you get into a home with rates that are untouchable for people like myself. So when you’re absolutely ballin’ and your financial picture is crisp, seeking financing from a big banking institution may serve you best unless you want someone handsome like myself servicing your loans so you can brag to your friends.
Now, I’ve been all three, but I’m going to tell you about my least favorite one, and that’s a broker. Now, I’m not going to say anything bad about brokers. Brokers can at times have the best pricing on the market. A broker is an independent individual whose licensed usually through the D.R.E and their job is to be able to negotiate through a plethora of lenders.
Typically, they’ll have anywhere between 10 to 100 different lenders that they can position your loan with. They work directly with different lending institutions and try to find the right product and the right price point for you. Similar to the big banks, when you have a very clean, easy file, a broker is very beneficial because they’re able to negotiate with competitors on your pricing of your loan.
Now, I said earlier that it was my least favorite, and that was just because I felt alone. I felt like, being a broker. You’re a lone wolf and you’re not tied to a major corporation or a company who’s in the trenches with you. You’re just an independent banker who’s trying their hardest to service loans for everyone out there.
If I was a type of loan officer who did one or two loans a month, I would definitely be a broker because it would give me the ability to leverage different institutions against each other, find great rates, find great products, and give as much attention as needed to one or two files. Now, my favorite is what I do now.
Again, I’ve been a banker. That’s where I started my career as a loan officer for First Federal. I’ve been a broker for two different brokerages, but the majority of my career has been with American Pacific Mortgage. I love being a mortgage banker. At American Pacific Mortgage I’m able to not only be a banker, but I’m also able to be a broker.
I get the best of both worlds. And what does a mortgage bank do. A mortgage bank is a company that underwrites files directly for Fannie, Freddie and Ginnie May. This means that when you get a loan through our company, everything is done in-house from your loan officer working for the company to the credit department, to the pricing department.
Everybody works together on your loan within one entity. Now, if you have something that’s very easy to do and you have an 800 FICO, I have the ability as a banker and a broker to shop various lenders. I love sending loans to rocket mortgage.
I know it’s not popular out in the marketplace, but I have a really good reputation within Rocket Mortgage and I send a lot of my files to them because if they’re able to give my clients the best rate and the best price, then I’m going to do the right thing for them.
And American Pacific Mortgage agrees with me that we should always do what’s best for the client. And sometimes that’s doing a loan outside of our company for the better of the customer.
So to put it simply, the big bank is great for their customers who have a high net worth. The broker is great for an easy traditional file that they’re going to be able to shop around.
And of course, it’s very important that you work with the right broker because, remember, they’re independent.
And the final one is a mortgage bank, which is traditionally who you’re going to work with. Companies like American Pacific Mortgage. We’re going to be able to service your loan and close your loan from start to finish, In House.