If you are in the process of selling or purchasing a home, you may be wondering, is it better to get a mortgage from a bank or a mortgage company?
Keep reading to find out; the answer may surprise you.
What Is the Difference Between a Bank and a Mortgage Company?
Many people confuse banks and mortgage companies. However, banks offer loans, while mortgage companies provide mortgages. It’s important to remember that the two are very different. A mortgage company is an intermediary, often using a salesperson or broker to help you find the right loan. Mortgage companies often provide working capital loans, for example, to help you meet an income or capital requirement you’ve set. Mortgage companies usually do not offer the full suite of loan products available from banks.
On the other hand, banks offer loans, but they’re a bit different. Banks provide loans for your down payment and any closing costs. They also offer mortgages for the primary home, second home, investment properties, and home equity loans.
What Are the Benefits of a Bank vs. Mortgage Company?
Many people are unsure how bank mortgage loans are different from mortgage companies. The main difference between the two is the term of the loan. Banks are usually for a shorter time than mortgage companies. For example, you may be offered a 30-year mortgage or a 15-year mortgage. The banks also provide much lower interest rates than mortgage companies. How to tell the difference between a bank and a mortgage company: A mortgage is an agreement between you and your mortgage lender. It is also a contract between the lender and your creditor (i.e., the seller or the person buying your home). It would help if you also asked your lender how many loans they have issued. A loan is simply a large debt that must be paid back in full.
How Do I Apply for A Mortgage?
Buying a home is a vast and expensive purchase that you do not want to do alone. You need to have the help of a realtor to put together the perfect home that you and your family can afford. However, if you have a mortgage, you can get a loan and be ready to go house hunting immediately. Here are the steps for getting a mortgage from a bank vs. a mortgage company: To get a loan from a bank, you will have to come into the bank with a pre-approval letter from your current lender. You will have to submit your most recent pay stubs, bank statements, and proof of employment to help the bank determine your income and where you stand when it comes to debt. You also will have to fill out a loan application.
Bank versus mortgage companies have very different fees and may have significantly additional terms; some of the best features to keep in mind are:
No long term commitment: Some mortgage companies offer the ability to cancel your loan in 90 days or three years.
The ability to shop for different mortgages in a small business: A mortgage from a bank means they are a single borrower that guarantees you the loan.
Bank loans have higher monthly payments: The majority of banks will offer the ability to get an automatic mortgage so that you do not have to go through the whole application process.
Contact Utah Sell Now
Truthfully you could get a mortgage from a bank or a mortgage company, but why pay a mortgage at all? Instead, contact the experts at Utah Sell Now today. We buy homes in the Salt Lake City, Utah, area in any condition fast and in cash so you don’t have to go through the hassle of staging and showing your home, or paying a realtor. Call us for your no-obligation written offer and you could have money in hand for your home in as little as seven days.