subject: Home Loans vs. Mortgages and Banks vs. Mortgage Brokers [print this page] Home Loans vsHome Loans vs. Mortgages and Banks vs. Mortgage Brokers
Usually when referring to financing a home purchase the terms home loan and mortgage are used interchangeably, however their meanings differ and a clear line should be drawn between the two.
Home loan defines a type of debt originated by the amount of money lent to an individual for a property purchase. The sum is to be repaid within an agreed term with certain interest.
The Mortgage is a debt security tool used to decrease the perceived risk by the lender. It represents a legal document stating that the borrower stakes his real estate as a guarantee for his intent to pay back his obligations on the loan. The mortgage creates a lien on the property which is posted in the public records.
Once clearing the terms we could try to trace the lenders differences as well. Bank loan officer compared to the mortgage broker have similar vocations, however they offer distinct services,
The bank loan officer offers the product portfolio of a single institution the one he is representing. The mortgage broker is a freelancer who works with different lenders and offers a greater variety of options to his customers. He has the ability to choose the best plan for a given individual and by comparing the available information he conducts a market research, which is of high value to the customer.
The mortgage brokers are frequently chosen by people who do not have a good credit score and are searching for alternative sources of financing.
Bank officer work within one's area and understand well one's troubles and needs. Whereas the mortgage broker lacks in this regard, he compensates with finding a financing options for people who are being denied a loan from the bank.
Whether you are up for a higher or lower monthly installments and if you have a good or bad credit score you will choose the bank officer or the mortgage broker, however choose wisely and remember that not always the cheaper option is the more favorable one.
