When you are dealing with a bank or a mortgage company that is underwriting your file and/or funding your loan, the answer to this question is cut and dry - the loan is acting as AN AGENT OF THE LENDER.

When you deal with a Mortgage Broker, there is a great advantage to you because the Broker is NOT OBLIGATED to any particular lender and has the ability to find a program that best suits YOUR needs.

This isn't to say that loan s at banks are "out to get you" or that they are going to try to charge you the highest rate possible. What it does mean is that a banker is limited to the products and services offered only by their own institution, and will try to fit you into a program that they offer, not necessarily to the one that best suits your needs. There are many reputable banks that offer valuable products and services, however, only a Professional Mortgage Broker has access to a wide variety of products from many different lenders, and can match your loan to a lending institution without any fiduciary obligation to that institution.

Bankers may try to make a prospective customer think that a Broker is a "middle man" and that their service will only add additional fees to the transaction. In fact, a Mortgage Broker typically receives a discounted rate off the lender's posted retail rates, called a "wholesale rate." Thus, a Broker not only has the ability to match the lender's retail rate, but can often times undercut that rate. This means a customer can often get a better rate through a lending institution by going through a Broker then they can by going to the lending institution directly.

While there is no agency relationship between the customer and a Mortgage Broker, the independent nature of a Broker gives the loan the ability to shop for the best rates and/or programs in behalf of the customer, among a variety of lenders throughout the country, with no additional cost to the customer.