💡Knowing your 💸buying power💪🏽, Part 2: Banks versus Brokers
Are you considering buying a home this spring? Are you wondering about the pros and cons between working with a bank and a broker? Do you have your essential pre-approval letter in hand as you browse the internet and attend open houses? Let me help.
I want you to consider the pros and cons of 'brokers versus banks' and felt it would be very helpful to my existing clients and my future clients to examine my key take aways.
1. Talk to several banks and brokers and get a sense of what kinds of lender programs are best suited to your financial situation. If you have an established relationship with your bank with solid credit, they may provide a discounted interest rate as they have the documented history of your stated income. As you speak with several sources, keep track of interest rates, lock-in fees, and points on a spreadsheet.
2. For jumbo loans (loans that exceed $598,000.00 in Suffolk County, Middlesex County, Norfolk County, and Essex County as of January 2017) banks tend to have more options for these loans whereas brokers are sometimes more limited. The downside is that you don't have the lender from the bank on speed-dial who will pick up their phone immediately and do the legwork for you. The primary con of a bank is their timeline can be much slower. This slower timeline can really impair your buying power and thwart your offer acceptance chances from snappy sellers, especially with multiple offer situations where they are empowered to be selective about price, terms, and timelines in the offer.
3. Whether your choose to work with a bank or a broker, do yourself a huge favor and talk to banks and brokers as you shop for the right scenario for your buying power. In the end, the bank or broker that asks you the most questions, may be most worthy of your trust and your business. I'll conclude with a great quote from Bob Walters, Chief Economist for Quicken Loans: “People say, ‘How do I know if I’m talking to a good mortgage banker?’ and I tell them, ‘It’s the person who asks you the most questions,’ ” he said. “Someone who is just quoting you rates, well, you might as well be buying gasoline.”
Don't have the right REALTOR®? Need to know your buying power? I can be reached at [email protected]