Difference Between Mortgage Broker and Mortgage Advisor
When planning to buy a home, getting a mortgage is usually the most popular method among home buyers.
A mortgage loan is a long-term commitment and it’s not always easy to get approved for a mortgage. Therefore, it is best to hire a professional broker or mortgage advisor to help you with your mortgage process.
Although you can look for a mortgage lender on your own, hiring a professional can make the process much more stress-free and hassle-free. However, when hiring an online mortgage broker or advisor, you may feel confused about which one to choose as both may seem to have relatively similar roles.
Mortgage brokers and advisors, both assess your financial condition and assist in applying for a mortgage loan. However, they play different roles from one another in many ways.
How are mortgage brokers different from mortgage advisors?
Below are the key differences which distinguish the two and can help you make an informed decision:
A mortgage advisor usually works with a particular legal lender, such as a bank, credit union, or other authorized financial institution. They work as a mediator between the borrower and direct lenders.
Like mortgage brokers, mortgage advisors are highly knowledgeable and trained in helping clients explore their best mortgage options and negotiating with the bank on behalf of the applicant.
Their primary responsibility is to educate the borrowers regarding the various mortgage products. However, they can only recommend the mortgage products offered by the lender they work for, i.e., the bank. On the other hand, a mortgage broker can recommend a wide range of mortgage options from various lenders.
Mortgage advisors provide comprehensive details about the mortgage process and answer any questions the applicants may have. Additionally, they help candidates fill out their mortgage applications.
They usually work on a salary provided by the direct lender and may also enjoy a commission if the applicant gets approved for the mortgage loan.
Mortgage brokers perform a lot of similar duties as mortgage advisors, except they are not bound to work with a particular lender. They either work independently or as part of a mortgage firm that deals with different lenders.
These professionals usually have connections with a wide network of mortgage lenders. As a result, they provide better flexibility and a variety of customized mortgage products that borrowers can opt for.
For example, a mortgage broker can help you get different loan offers from diverse lenders so you can compare them and choose the one that best fits your needs.
Moreover, you might be able to secure a better deal with the help of mortgage brokers as they don’t promote a single lender, unlike mortgage advisors. They work to find the best rate and mortgage programs for borrowers.
They will handle all the hassle of finding the right mortgage lenders and negotiations so you can save valuable time, energy, and money. However, similar to mortgage advisors, they also charge fees + commissions.
Mortgage Advisor vs. Mortgage Broker: Which should you choose?
Whether you should consult with a mortgage advisor or broker depends on your financial condition and mortgage needs.
For example, consulting with a mortgage advisor can be beneficial when you meet the following criteria:
- Credit Scores: Your credit rating needs to be high when you need a mortgage loan from a bank.
For example, an applicant with a credit score of 660 or above may find it easier to get approved for a mortgage from the bank. In that case, banks usually have their own mortgage advisors to assist you.
- Income proof: Applicants with a stable income and employment history can be considered well-qualified for a traditional mortgage loan.
- Low DTI: Banks and other traditional financial institutions usually review the applicant’s Debt to income ratio (DTI) when assessing the mortgage application. Generally, a low DTI ratio (lower than 45%) is considered ideal for qualifying for a mortgage from the bank.
- Mortgage amount: A financial institution usually has specified limitations on maximum loan amount when it comes to granting mortgage loans. Thus, if you want a mortgage amount that falls within the highest limit and you qualify as per the specific requirements, a financial advisor may help you out.
So, when to consult with a mortgage broker?
If you don’t meet the credit requirements of the bank, say your credit score is low, a mortgage broker might still be able to help you get mortgage approval.
Mortgage brokers have connections with plenty of direct lenders to fulfill your financial needs. Thus, you won’t need to struggle to find third-party lenders by yourself. Additionally, you will get access to an extensive selection of mortgage products with many different benefits.
Thus, when you have a less-than-ideal credit score and want to get approved for a mortgage, an online mortgage broker might be your best bet.
Mortgage brokers possess extensive knowledge of the mortgage industry, different types of mortgages, and other mortgage rules and regulations. Thus, they can help streamline your mortgage application process.
If you are interested in applying for a mortgage, get in touch with our team at PierPoint Mortgage to know your eligibility today!