Houses are purchased to make homes. You may also buy a house for investment or for renting. Whatever the reason is, if you are planning to purchase a house or property, you are probably considering a mortgage to help you finance the purchase. The first question when you think of mortgage in New York is whether you should go to a mortgage broker or to a bank. Well, honestly, both have their pros and cons.
Broker versus Bank
The biggest advantage that banks have over brokers is that they are established institutions and are hence trustworthy. You probably know that a mortgage is a loan that helps fund your purchase. The collateral against the mortgage loan is the home you will purchase. The major point of difference between a bank and a mortgage broker in New York is that the bank is bound by regulations while the broker is not. A broker can offer you better deals than a bank simply because he has the freedom to do so. Brokers partner with a number of lenders and offer deals that suit both the lender and the borrower. Banks, on the other hand, have fixed deals and predetermined procedures and requirements that must be met in order to get a mortgage loan.
Comparisons are Good
It is a good idea to visit both brokers as well as banks, and understand the requirements and deals on offer before you make a decision. You could probably compare deals by entering the details in an excel sheet. Points of comparison include interest rates, fees, duration, total amount, EMI, and penalty for default. Even though you’re planning to make timely payments, you should still learn about the default penalty before getting the loan.
Ideally, you should visit at least three brokers and three banks in order to get a fair idea of what is on offer.
Interest rates keep changing with new bank or government policies, so take them with a pinch of salt. Another important consideration is your own income and repayment capacity. Include this as a part of your spreadsheet. You may also include potential expenses such as upcoming college fees, earlier mortgage repayments, weddings, and other such expenses so that you can properly assess your capacity to repay.