Can You Get Refinancing Without Going Through a Broker?

The owner of this house might have used a bank for its financing.

The two major types of mortgage providers are banks and mortgage brokers. Borrowers can consult either type of provider to procure mortgage refinancing.

Significance

Due to the increased scrutiny in the mortgage market, more and more independent brokers are going out of business.

Function

A mortgage broker pairs borrowers with lending institutions. A borrower can forgo this service by going directly to the lenders.

Considerations

Borrowers with complicated credit histories and lower credit scores need more options than a traditional borrower. Mortgage brokers provide those options.

Benefits

Mortgage brokers have more options than banks. Mortgage brokers have several hundred options to choose from, while banks have a limited number of products.

Warning

While mortgage brokers have a wider variety of products, because they connect borrowers with lenders, they charge additional fees for the service.

References

• FederalReserve.gov: A Consumer's Guide to Mortgage Refinancing
• NYTimes.com: Why You Should, or Shouldn't Use a Mortgage Broker