Navigating Mortgage Lenders

Picking a mortgage company is a big decision that can either save you thousands or cost you a fortune. With an overwhelming array of options, from banks to credit unions to online lenders, making the right choice seems like a daunting task. But fear not, we will cut through the confusion.

The Three Types of Lenders

Generally speaking, mortgage companies fall into three main categories: banks, credit unions, and mortgage finance companies. Let's break down the pros and cons of each so you can make an informed decision.

1. Banks: The Pros and Cons

Pros:

• More product options and flexibility on borrowing amounts.
• Various programs and scenarios to help you qualify.
• Offer HELOC and advancable mortgage products.

Cons:

• Aftercare support can be lacking.
• Collateral mortgages may limit your options.
• Haggling for competitive rates is often required.

2. Credit Unions: The Local Option

Pros:

• Local support for your community.
• Common sense lending with flexibility on unique circumstances.
• Greater use of rental income for qualification.

Cons:

• Limited flexibility on mortgage prepayments.
• Collateral charges can impact the cost of switching lenders.
• Slower support due to smaller staff.

3. Mortgage Finance Companies: The Specialized Players

Pros:

• Excellent aftercare support.
• Flexible online portals for prepayments.
• Competitive interest rates with lower prepayment penalties.

Cons:

• Limited flexibility for borrowing more money.
• Not the best option for rental income qualification.

Making the Right Choice

Now that you understand the pros and cons, the key is aligning your choice with your long-term goals. Consider factors like portfolio growth, refinancing plans, prepayment preferences, and your tolerance for penalties and restrictions.

Always remember, working with a mortgage broker gives you access to the best rates and terms without charging you a fee. We guide you in the right direction, ensuring your decision aligns with your unique needs.