Why Not Just Use My Own Bank?
I get asked this in some form almost every week. I already bank there. They have my checking, my savings, my car loan. Would it not be easier to just get the mortgage there too?
Sometimes, honestly, yes. Your bank is the right answer more often than people in my line of work like to admit. But the reason to shop is not that banks are bad. It is that a bank can only tell you what a bank thinks. It has one rulebook, and if your file does not fit that rulebook, the answer is no and there is nowhere else for it to go.
What is the actual difference?
A bank underwrites you against its own products. One set of guidelines, one pricing sheet, one credit box. If you fit, that is a clean and simple process, and there is real value in simple.
What I do is different in one specific way. I take one application and one credit pull, and I shop that file across dozens of wholesale lenders looking for the combination of pricing and guidelines that actually fits it. Not the combination that fits an average borrower. The one that fits yours.
Online lenders are a third thing. They are fast at producing a quote, which is genuinely useful. The speed tends to hold up right until something about your file gets complicated, at which point you are explaining it again to whoever picks up the phone that day.
Does shopping around wreck my credit?
This is the fear that stops most people, and it is worth clearing up.
I pull your credit once. That one pull goes out to multiple lenders. You are not getting hit repeatedly because I sent your file to several places.
On top of that, the bureaus generally treat multiple mortgage inquiries inside a normal shopping window as a single inquiry, precisely because they expect people to shop for a mortgage. The system is built with the assumption that you will look around.
How do you get paid, then?
Fair question, and you should ask it of anybody handling your loan.
On a given loan I am paid either by you or by the wholesale lender, and I am not permitted to do both on the same file. There is no arrangement where I collect a fee from you and quietly collect a second one from the lender. When the lender pays, that compensation is already built into the price the lender quotes, which means you can see it in the numbers rather than having to take my word for it.
If somebody cannot explain their compensation to you in plain language, that itself is information.
When is the bank actually the better call?
I will say this plainly, because I would rather you trust me later than win every conversation now.
Go with your bank when your file is clean and straightforward, W2 income, solid credit, nothing unusual about the property. Go with your bank when you have a real relationship discount, and confirm it is real by getting it in writing. Go with your bank if sitting across a desk from somebody in a branch is how you want to do this. That preference is legitimate and I am not going to talk you out of it.
When does it go the other way?
The difference shows up when a file has any texture to it.
Self employed or 1099 income, where how a lender reads your tax returns changes the outcome more than anything else in the file. A prior denial somewhere else, which usually means one rulebook was tested and nobody tested a second one. Condos, which down here is a category all its own, because the building gets approved alongside you and buildings fail for reasons that have nothing to do with the buyer. Retirement income, rental income, a credit event a couple of years back.
In every one of those, the question is not whether you qualify. It is whose guidelines you qualify under. That is a question one lender structurally cannot answer.
The Florida part of this
Locally there is an extra layer. Condo insurance, homeowners premiums, and how self employment income gets calculated all sit right where files get tight. The gap between a bank saying no and somebody finding a yes tends to open up in exactly those places.
That is not a knock on banks. It is what happens when a market has quirks and a rulebook was written nationally.
The short version
A bank gives you one answer from one rulebook, and for a clean file that is often the right answer. A broker takes one application and one credit pull and asks the same question of many lenders. If your income, your credit history, or your building is anything other than ordinary, that difference is the whole ballgame.
If you already have a quote from your bank, bring it to me and I will tell you honestly whether I can beat it. Sometimes I cannot, and I will say so. Call or text me at (941) 941-5150. Tony Fitzgerald, NMLS #1284924. There is more on the broker versus bank page, and the second look on an existing quote is free.
Talk it through
Have a question about your own situation? I answer the phone. No pressure, no pitch, and if your current plan is the right one I will tell you that.
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More from Tony
1rmtg.com home · About Tony · How I run a mortgage call · All Field Notes posts
Loan programs: All loan options · First-time buyer · Self-employed · Refinance · HELOC and home equity · Non-warrantable condos
Where I lend: Sarasota · Lakewood Ranch · Bradenton · Venice · Every Florida location
Still have a question? 74 mortgage questions, answered straight
Tony Fitzgerald, NMLS #1284924. 1st Response Mortgage, powered by Mpire Financial Group LLC, NMLS #2108504, Florida Mortgage Lender License #MLD2467. Equal Housing Lender. NMLS Consumer Access: nmlsconsumeraccess.org. This article is general education, not financial, tax, or legal advice, and not an offer of credit or a commitment to lend. Terms vary by borrower, property, and transaction, and program guidelines change over time.
