Pros and Cons of Dealing with Banks
Every variety of lender in this book has its own pluses and minuses. Here are the specific attributes of mortgage banks:
Pros
Competitive rates, depending on your credit rating and banking relationship: The more assets you have in the bank, the better your chances of getting a good deal.
Standard origination fees and commissions: Loan officers at banks usually make a fixed amount on any loan they originate. If they see that borrowers do not have A-rated credit, they tend to reject them or refer those customers to mortgage brokers or other lenders in the marketplace who serve those with less-than-perfect credit.
But there are negatives as well:
Cons
Banks are increasingly an outlet for borrowers with top credit, not the growing ranks of working people with problem credit.
You're only offered the loan choices that lender originates, which means you don't get a wide variety of choices.
Mortgage banks have a historic edge in the marketplace simply because they are well known to most people in a community. After all, they're right there on the corner. But realize that your credit will generally have to be very good to take advantage of the best rates they have to offer.
