What you ought to know (#8)...

What is the downside of using a "name brand" lender?

Many borrowers feel more comfortable going to a "name brand" lender versus a mortgage broker, because that name recognition provides them comfort, and that the lender´s name is on the line, so the thought is3;they would never jeopardize it by exploiting borrowers.

However, name brand lenders tend to price slightly above the market. They like to think that they provide better service, or in essence, that borrowers should pay a little more for the comfort of dealing with them.

The truth is that the name brand lender works with their own loan officers, and those loan officers work on commission. Built into those commissions are their marketing costs, and any overages they can get out of the borrower. Secondly, the loan officer can only sell their lenders´ products.

Mortgage brokers have the ability to shop for the borrower, and determine the best product for the clients´ particular needs. Since they don´t have heavy marketing budgets, they can work on lower commissions, usually offering better rates to the borrower. In the case of Arrowhead Home Loans, we are local, use local appraisers, and are always accessible. Our reputations are known throughout the community we serve.

Bottom-line, the borrower may pay a premium price to deal with a name brand lender, to find the best mix of products at the best rates, you should have them talk with Arrowhead Home Loans