When it comes to obtaining a mortgage, there are two primary options for consumers to consider: working with a mortgage broker or going directly to a lender. The choice between these two options can have a significant impact on the overall cost of the mortgage and the level of service that the borrower receives.
The Basics of Mortgage Brokers vs. Lenders
Before diving into the market share numbers, it’s important to understand the basic differences between mortgage brokers and lenders. A mortgage broker is a middleman who works with multiple lenders to find the best mortgage rates and terms for their clients. A lender, on the other hand, is the institution that actually provides the funds for the mortgage.
While both brokers and lenders can offer a variety of mortgage products, brokers generally have access to a wider range of options due to their relationships with multiple lenders. This can often result in better deals for borrowers who work with brokers.
According to recent data, mortgage brokers have been steadily gaining market share over the past few years. In 2018, brokers originated 14.1% of all mortgages, up from 11.7% in 2013.
This growth can be attributed to a number of factors, including increased consumer awareness of the benefits of working with a broker, as well as the growing number of lenders who are willing to work with brokers.
In addition, brokers have been able to build a reputation for providing more personalized service than many lenders. This can be especially important for borrowers who are looking for guidance and support throughout the mortgage process.
Despite the growth of mortgage brokers, lenders still hold the majority of the market share. In 2018, lenders originated 85.9% of all mortgages, down slightly from 88.3% in 2013.
This is largely due to the fact that many consumers still prefer to work directly with their bank or credit union when obtaining a mortgage. In addition, lenders often have more streamlined processes and may be able to offer more competitive rates for certain types of mortgages.
Factors to Consider When Choosing Between a Broker and a Lender
When deciding between a mortgage broker and a lender, there are a few key factors to consider. These include:
- The type of mortgage you are looking for
- Your credit score and financial situation
- Your desired level of service and support
- The reputation and track record of the broker or lender
Ultimately, the decision between a broker and a lender will depend on your individual needs and preferences. It’s important to do your research and carefully consider all of your options before making a final decision.
The Bottom Line
Whether you choose to work with a mortgage broker or a lender, the most important thing is to find a partner who can help you navigate the complex mortgage process and find the best possible terms for your unique situation.
By understanding the market share numbers and the differences between brokers and lenders, you can make an informed decision that will set you up for success in the long run.