Back to the Mortgage Rate Shopping Guide
Is it better to use a mortgage broker or a bank?
Compare a written offer from each. A broker can shop among the lenders they work with. A bank can lend directly and may have programs or pricing reserved for its customers. The better choice depends on the options available for your scenario, the cost over the time you expect to keep the loan, and who can meet your closing date.
Ask each one what they can actually offer
A bank loan officer generally works with the bank's own products. A broker can compare options across their participating lenders. Ask both about experience with the specific issue in your file, whether it is self-employment income, a condo project, a VA loan, or an appraisal deadline. Ask who handles underwriting, what information the quote assumes, and how quickly they can lock and close.
Compare the same deal
- Loan structure
- Same loan amount, program, term, and fixed or adjustable rate
- Pricing
- Quote date, lock period, points, lender credits, and origination charges
- Monthly budget
- Principal and interest, plus mortgage insurance and other housing costs where applicable
- Closing
- Cash to close, what the quote excludes, and the lender's closing timeline
Suppose one offer is $1,800 more expensive upfront and saves $60 a month in principal and interest. The simple break-even is 30 months. If you expect to sell after two years, those monthly savings total $1,440. Compare remaining balances too, and check that the closing-cost difference reflects actual charges rather than different escrow estimates.
Questions to ask before choosing
Ask whether the quote is locked, who will handle a closing delay, and whether the quoted program fits the property and income documentation. If a bank quotes a relationship discount, ask what balances or accounts you must maintain and for how long. If you use a broker, ask how many lenders they compared for your specific scenario and how they get paid.