Buying a home is an enormous undertaking. You put a ton of time and care into the style, size, price, neighborhood, school district and condition of the home you purchase, so why not put the same, or even a fraction of the care into finding the best lending option available to you? Many people head straight to their local bank or credit union to attempt to finance their home purchase. While it makes logical sense that you would talk to your banking institution about financing a home, it may not always be the best option. An institution that specializes and gives great service in banking may not always hold the same expertise in the lending process. While there will be benefits and disadvantages to both option, below are a few of the lesser known reasons you may consider talking to a mortgage broker about financing your home instead of assuming your local bank is the best or only option:

1. More forgiving lending requirements:

Banks typically have a set group of criteria when deciding eligibility for home loans. Because the bank is the only institution that will be considered when applying, if you don’t fit into their specific criteria, you may receive a denial that could shut down your home buying dream altogether. Since varying lenders will have slightly different guidelines in the underwriting process, a denial in one place could be an approval at the very next. If you use this logic, you could be applying from bank to bank- wasting your time, potentially dropping your credit after multiple credit checks, and putting yourself in a position to lose out on the perfect home when it comes along and you don’t have a preapproval ready. An experienced mortgage lender will have access to multiple wholesale lenders and the broker should know the nuances of each lender. By having multiple lending sources available, the broker will be able to match you to the best lender with the highest chances of approval straight from the beginning. Less time, money and frustration required.

2. More specialized knowledge:

Again, bank lenders have experience dealing with more cut and dry lending cases within their institution guidelines. They can be efficient with what they know, but what if your situation isn’t so easy? Does your income fluctuate? Are you self employed? Maybe you have some history on your credit that is included with some lenders but not with others? These are items that local banks may have a harder time navigating in comparison to an experienced and knowledgeable mortgage broker. Mortgage brokers have seen a lot. They have the battle wounds to prove it. Sometimes, there is no replacement for good old experience and fortitude.

3. Speaking of fortitude...

The way in which lenders are paid will vary drastically between banks and a mortgage broker. Typically, a professional in a bank gets paid an hourly rate, and may or may not make a bonus or stipend for closing a loan. Mortgage brokers ONLY get paid when a loan closes. They don’t typically have a salary to lean back on regardless of whether they close loans or not. Banks see a ton of applications from homebuyers only because of the simple fact that they are a recognized lending institution. Brokers typically have to work for their leads and won’t easily let them drop through the cracks when a loan is anywhere near closeable. In other words, a good mortgage broker will work for you. Tirelessly. If you have reservations about rate or costs, they will do their best to beat the bank and keep your business. There may, however, be times that a bank will have more flexibility on rate and will be able to outperform some brokers, so this is something to consider as well if you have a relatively easy loan and are looking for the lowest rates available.

So many people let familiarity and convenience be the deciding factor in where they decide to get their mortgage. Striking out past what you already know can be scary, like any other unknown, but what is even scarier is getting your loan denied at the last minute or learning later that you got terms that were sub-par to other options that were just beyond your knowledge. Do yourself a favor and see what’s out there before committing to your local bank or even a mortgage broker. The options vary and not all lenders are equal.