Of all the decisions facing any prospective home buyer, one the most critical is where to find the best mortgage option, the one with the least hassle and the most favorable financing terms. When, how much, and even if you’ll be able to borrow what you need to buy your dream house can often come down to who you work with to make it happen. For most people, there are two possibilities, a mortgage broker or a direct lender, i.e. a bank, credit union or savings institution of some sort.
A mortgage broker exists for only one reason, to put borrowers together with lenders. He or she does not actually lend you any money, but charges you a small fee, usually one- or two-percent of the principal, on top of the interest and other closing costs, for performing the service of connecting you to the people who do. And, once the ink is dry on your sale, you will most likely never see your broker again. Instead you will be passed along to a mortgage servicing company, again, usually not the people from whom you are actually borrowing.
A direct lender such as Litchfield Bancorp, on the other hand, will not only be actually lending you the money you need, but will be able to give you fast and reliable answers to any questions you may have about the terms of your loan and, if need be, make adjustments. Also, they will usually be responsible for servicing your loan, and will be there to assist and explain, or to resolve any issues that may arise for as long as you have it. Direct lenders are also full service institutions, with a wide spectrum of other financial resources, like deposit accounts, trust accounts, retirement programs and other investment products that allow you to have an ongoing relationship with them across a range of financial matters.
For years, the conventional wisdom has been that brokers give borrowers the advantage of choice. They have access to more lenders with a wider array of products and at more competitive prices. This was considered especially desirable for people with less than perfect credit histories, minimal funds for down payments or irregular work situations. As we all know, though, the world of mortgage finance has changed dramatically in the years since the downturn. The “miracle” mortgages of the pre-recession housing market for the most part no longer exist, and if they do exist, may come with so many questionable strings attached that most people would be wise to avoid them. In the wake of the general tightening of credit and financial requirements that have been established across the board in the past two years the ability of brokers to offer loans with substantially lower requirements has all but disappeared. Everyone, bankers and brokers alike are required by regulations and financial market realities to offer a similar range of products and packages.
At Litchfield Bancorp our team of mortgage specialists won’t pass you from department to department – we work with you from the initial application all the way to closing date. If there is a problem, we are a phone call away. We pride ourselves on being the small bank with the BIG Customer Experience. With competitive rates AND an easy process –we just want you to worry more about what paint colors you want for the new living room and NOT about how you’re going to finance your dream.
Litchfield Branch Manager, Vice President
NMLS MLO ID: 698742