Broker vs. Banker
Mortgage Broker
Michael Wolff Mortgage Broker
Published on June 10, 2019

Broker vs. Banker

Do you know the difference between brokers and bankers? If you’re looking to buy or sell a home, it may be time to brush up on your real estate knowledge. And if you’re not quite sure which is right for you, we’ll break it down for you here. Take a guess before we start: in the battle of broker vs. banker, which do you think will win? Got your bets ready? Good. Let’s get ready to RUMBLEEEE!

Verify my mortgage eligibility (Apr 4th, 2020)

What’s The Difference Between Brokers & Bankers?

Before you can decide which is right for you, you have to know the difference between the two. Thankfully VantageMortgageGroup already came up with great definitions so we don’t have to! 

They describe brokers as “A transparent educator working for the consumer versus one retail lender, with independence allowing for wholesale lender competition and choice”. And their definition of a mortgage banker is that they’re “An ambiguous salesperson working for and representing one retail lender, rather than the consumer”.

To simplify that: brokers work for their clients, searching around for the best mortgage loans. Bankers work for one lending retailer, not for the clients.

Verify my mortgage eligibility (Apr 4th, 2020)

How Do They Get Paid And Why Do You Care?

This is where things get interesting. Let’s start with bankers. According to Chron.com they generally work on an annual salary and may receive financial bonuses for good work.

Brokers, on the other hand, only receive a commission of about 1 or 2% of the total amount of the loan, though some may charge flat fees. But what keeps them from being shady and finding you loans that’ll put more change in their pockets? Oh, just a handy little law called the Dodd-Frank Act, which prevents them from doing a whole slew of bad things such as charging hidden fees. Check out this article from Realtor.com to learn more.

Now, which would you work with? Someone who could potentially earn bonuses by getting you signed up for higher interest rates? Or someone who is legally not allowed to do so?

Verify my mortgage eligibility (Apr 4th, 2020)

Additional Points

Another point to consider is that both will be experts. They know what they’re talking about so neither wins in that field. 

And what about convenience? Brokers win this round; they’re working for you, not for an institution, which means they’ll be more available to help you through this process. 

Finally, brokers have the ability to shop around and find you the best possible rates while bankers are limited to their institution’s rates.

Verify my mortgage eligibility (Apr 4th, 2020)

I don’t know about you guys, but I’d rather have a broker in my corner. Saving money without cutting corners seems like a good idea, and that’s more likely to happen with a broker than a banker. Let’s just call it; brokers are taking the win.

Now, who won their bet?

Show me today's rates (Apr 4th, 2020)
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Michael Wolff Mortgage Broker
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