Bank – a bank is a direct lending institution and funds its own loans. In layman’s terms the bank is the one lending the money…it is their money. The bank directly underwrites and approves loans and then sends their money to the closing attorneys office for your closing.
Broker – a broker doesn’t work for a bank however has relationships (legal contracts) with multiple banks OR lending institutions. Our company, for example, has relationships with about 20 banks/lending institutions. Some of these relationships are with banks you’ve heard of like Suntrust, 5th 3rd, etc. And some are with smaller privately held companies you may not have heard of. The banks solicit us. They want us sending them loans. As we are not bank employees they are not paying us a salary or benefits, they aren’t renting us office space, etc. For the banks there is no overhead. If we send them business it is almost all profit margin. These banks still underwrite the loans and send their money to closing. The main difference here is the money AND the underwriting is not ours (the Broker).
So why use a broker if we’re just going back to banks anyway? And is there an added “middle man” fee to use a broker? Here's a great reason to use a broker…we have access to multiple banks. Just because Suntrust rates are the best at 10 AM doesn’t mean they’ll be the best at 2 PM. We have the ability to shop multiple banks and use the banks that price right AND can close loans on time. Both of those items are key when buying a new home. What about the “middle man” fee? It’s actually quite the opposite! Most banks actually give us BETTER fees and rates than their in-house employees! Why? Because we’re not employees! There’s no overhead. No office space, salaries, health benefits, etc.
A good broker closes loans on time AND has great pricing! Always get a quote to be competitive and ask questions!
Max A Kallos
404-277-5884 phone
678-298-8947 fax
mkallos@mylhm.com OR max@maxkallos.com
Recognized in ‘Atlanta’ Magazine as a Five Star Mortgage Professional endorsed by Emmy winning consumer advocate Dale Cardwell!
