When looking for a mortgage loan here in Idaho, you can go to a bank or a broker.  What are the differences?  There are several.  I am a broker, so yes, perhaps my views are prejudiced.

• For starters, when you go to a bank, you are subject to their rules, costs, rates, and products.  A broker has many to choose from.  Yes, I am a broker, so I have my prejudices.  I also have 13 years of experience and observations as a broker.
• Although there is far less variation in underwriting rules now than a couple of years ago, there are still many differences.  For example, different lenders might have a different ceiling on debt-to-income ratio.  There are also differences in minimum allowable credit score.  A good broker will know different lenders’ rules (or know where to look them up) and can maximize the chances of loan approval.
• Where I do my personal banking, mortgage rates are posted by the front door.  A broker (me, for example) can generally offer a better rate and lower costs.  Does that mean I will always be better than every bank?  No, it means that I can generally offer the qualified borrower a better deal than what that bank appears to advertise.
• A good broker might offer mortgage products not available from your favorite bank.  For example, on large bank of my acquaintance does not offer VA financing.
• On the other hand, a bank might offer specialty products not available through brokers.  I am aware of at least one bank that still does not have a strict debt-to-income ratio requirement (50% down payment is required, though).  So a buyer with lots of cash but inadequate provable income should consider that.

The bottom line?  I’d say if you are just starting to shop for a  mortgage, ask your Realtor or friends for recommendations.  Ask questions and make sure you get written communications.  Read your prequalification letter and understand what it is saying and what it is not saying.