Unless you have enough money in the bank to pay cash for a home, you will need a loan. Some home sellers offer to finance your purchase of their property. Most
do not.
If you don't go the all-cash or seller-financing route, you'll likely look to a mortgage broker or banker for your loan. So what's the difference between them?
Mortgage bankers work for an institution that lends its own money. The mortgage banker determines if you qualify for the loan and sets the terms. (That doesn't mean that lender will always service your loan. Many times, a bank will sell your loan to another entity, though your terms will remain the same.)
A mortgage broker does not lend money. The broker works with many lenders to help you find a loan with terms acceptable to you.
There's no simple answer to whether a mortgage banker or mortgage broker is the best choice for you.
Mortgage brokers often claim they have access to a wider range of loan products by virtue of working with many lenders. Some mortgage bankers say they can offer lower fees. Both will argue that they offer better service.
Your best bet is to contact a few mortgage brokers and bankers to see what they have to offer. Look into more than their rates and fees. Check out what type of service you can expect from them, ask for referrals (and follow up) to judge their reputation, and find out how long the business has been around.
The banker or broker can provide you a Good Faith Estimate … a form that details all the costs associated with the loan. GFEs, as they're sometimes called, can help you figure out how one lender's offering compares to another's.
Your Texas REALTOR® also can provide information to help you make an
informed decision.
Additional information from other sources:
The Texas Department of Savings and Mortgage Lending regulates mortgage brokers and mortgage banking companies in Texas.
http://www.sml.state.tx.us/index.html
