If you’re shopping for a mortgage, you’ve probably wondered:
Should I use a mortgage broker, a bank, a credit union, an online lender, or a mortgage banker?
And then there is the question almost everyone asks:
Who has the lowest mortgage rate?
After more than 25 years in mortgage lending, I think borrowers should be asking a few additional questions.
Who has the right loan for me?
Who can actually get me approved?
Who will communicate with me throughout the process?
Who can perform within the deadlines of my purchase contract?
And perhaps most importantly:
Who do I trust to handle one of the largest financial transactions of my life?
Interest rates and fees absolutely matter.
But after decades of helping people buy and refinance homes, I’ve learned that the real test of a mortgage lender isn’t necessarily what happens when everything goes perfectly.
It’s what happens when it doesn’t.
That’s something you won’t necessarily discover by comparing advertised mortgage rates online.
So let’s talk about the different types of mortgage lenders, the advantages and potential limitations of each, and some of the things I’ve learned from real transactions throughout my career.
First, Understand Who You’re Actually Getting Your Mortgage From
Consumers often use the words bank, lender, broker and mortgage company interchangeably.
They aren’t necessarily the same thing.
Understanding the difference can help you decide where to start.
What Is a Mortgage Broker?
An independent mortgage broker generally doesn’t lend you its own money.
Instead, the broker typically has relationships with multiple wholesale mortgage lenders and can place loans with different companies depending on the borrower’s circumstances.
This can be a tremendous advantage.
If one lender doesn’t have the right program or pricing, a broker may have another option.
Mortgage brokers can offer:
- Competitive mortgage rates
- Access to multiple wholesale lenders
- A diverse selection of loan programs
- Alternative financing for borrowers who don’t fit traditional lending guidelines
- Flexibility when a borrower has a more complicated financial situation
I’ve worked with brokers throughout my career, and there are some excellent mortgage brokers.
But here’s where my street knowledge comes in.
Ask who actually controls your loan once it is submitted.
Who is processing it?
Who is underwriting it?
Who makes the final credit decisions?
Who controls the conditions?
Who funds the loan?
And if something happens three days before you’re supposed to close, who has the authority to solve the problem?
For a refinance, timing may be somewhat flexible.
When you’re purchasing a home, it can be an entirely different situation.
You have a seller, real estate agents, escrow or title, contractual deadlines, appraisal requirements, financing contingencies and a scheduled closing date.
Control over the process matters.
What Is a Mortgage Banker?
This is the category I think many consumers understand the least.
A mortgage banker may originate mortgages and use its own infrastructure to process, underwrite and fund loans. Depending upon the company and program, a mortgage banking operation may also have access to brokerage channels or outside investors for loans that are better suited elsewhere.
In my opinion and experience, a strong mortgage banking platform can provide an excellent combination of:
- Extensive loan programs
- Competitive pricing
- Control over the mortgage process
- Experienced operations teams
- Faster closing capabilities
- Access to specialized financing
- Established compliance procedures
- Technology and information security infrastructure
- The ability to escalate issues when something goes wrong
The product selection can also be extensive.
Depending on the lender, that could include:
- Conventional loans
- FHA loans
- VA loans
- Jumbo loans
- First-time homebuyer programs
- Down payment assistance
- Renovation financing
- Bank statement loans
- DSCR investor loans
- Alternative and non-QM financing
- Bridge financing
- Home equity financing
- Specialty programs
My Two Cents
I like having options and control.
If Program A doesn’t work, I want to know whether Program B does.
If an underwriting question comes up, I want access to people who can help resolve it.
If my client’s closing date is approaching, I want to know exactly where that loan is.
And if something goes sideways, I want the ability to pick up the phone and start solving it.
That’s something borrowers may not appreciate when they’re initially shopping for a mortgage.
They usually appreciate it tremendously when they’re under contract.
Is It Better to Use a Mortgage Broker or a Bank?
This is one of the most common questions consumers ask, and there isn’t a universal answer.
A broker may have access to multiple wholesale lenders and can be particularly valuable when you need specialized financing or want someone shopping among different lending sources.
A bank may offer attractive portfolio products, relationship pricing or certain jumbo programs.
But here’s something I would never assume:
Don’t assume your bank automatically has the best mortgage just because that’s where you keep your checking account.
Shop the mortgage separately.
And when you’re purchasing rather than refinancing, ask the bank a very specific question:
How quickly are you currently closing purchase loans?
Not theoretically.
Not what an advertisement says.
What are they actually doing right now?
Because that matters when you’re under contract.
And I learned that lesson again recently with one of my first-time buyers.
Choosing the right lender is only one part of buying your first home. Our First Time Home Buyer Guide From Start to Keys walks through the entire process, from preparing your finances and getting pre-approved to making an offer and reaching the closing table.
Real Story #1: The Down Payment Assistance Program That Almost Cost My Client the House
I had a first-time homebuyer who had already been pre-approved with me.
Then they heard about a rare down payment assistance program being offered exclusively through a large bank.
On paper, it sounded attractive.
My client believed it might be a better financial deal, and I completely understood why they wanted to explore it.
When they found a house and went into contract, they decided to apply with the bank offering the special assistance.
About 10 days into the transaction, my client called me almost in tears.
The bank had not even disclosed the loan yet.
The appraisal had not been ordered.
And now the loan officer was telling my client there might be a problem qualifying for the down payment assistance program because of their income.
Meanwhile, the clock on the purchase contract had been running.
My client was worried about obtaining the loan approval and appraisal in time to address the contractual contingencies. They were concerned about the seller potentially issuing a notice to perform if those deadlines couldn’t be met.
Do you know what my client wasn’t talking about anymore?
The special down payment assistance.
They weren’t talking about the interest rate either.
At that point, none of that mattered to them.
They wanted the house.
I still remember when they called me.
It was the Friday before Memorial Day weekend.
My team and I went to work.
We got the loan disclosed that same day. After the holiday weekend, we moved forward with the appraisal order on Tuesday and started pushing the transaction forward.
My client later told me:
“We got more done in three days than the other bank got done in almost two weeks.”
That transaction reinforced something I’ve believed for a very long time:
Don’t compare only what lenders are offering. Compare their ability to deliver it.
A fantastic down payment assistance program doesn’t help you if you don’t actually qualify for it.
And the lowest rate in the world doesn’t matter if the loan never closes.
That is why understanding the program requirements before relying on the assistance is so important. The Ultimate Guide to Down Payment Assistance in California for 2026 explains the different types of assistance available and what buyers should consider when comparing programs.
Are Credit Unions Better for Home Loans?
Credit unions can absolutely offer attractive mortgage rates and fees, particularly for their members.
For the right borrower and the right transaction, a credit union can be an excellent choice.
Where I encourage consumers to ask more questions is product selection and underwriting requirements.
Some credit unions have a relatively focused selection of mortgage products.
If you’re a W-2 employee with strong credit, predictable income and a straightforward purchase, their available products may fit your situation beautifully.
But what if you’re:
- Self-employed?
- Using bank statements to qualify?
- Buying an investment property?
- Looking for a DSCR loan?
- Buying a property that needs renovations?
- Looking for down payment assistance?
- Purchasing a high-value property requiring jumbo financing?
- Dealing with an unusual income structure?
Ask whether the credit union offers the financing you need before you go through the entire mortgage application process.
My philosophy is simple:
Don’t try to force yourself into a lender’s box because you already bank there. Find the lender whose box fits you.
Properties that need significant improvements may require a loan specifically designed to finance both the purchase and the work. The Ultimate Guide to Renovation Loans in Sacramento, Roseville & Rocklin, CA explains the renovation financing options buyers can consider.
Which Type of Mortgage Lender Has the Lowest Fees?
This question sounds simple.
It isn’t.
And here’s one of the most important pieces of advice I can give anyone shopping for a mortgage:
Never compare mortgages by interest rate alone.
A lower interest rate does not automatically mean a less expensive mortgage.
Let me show you why.
Real Story #2: His Interest Rate Was 1% Lower Than Mine. Then I Saw the $21,000 in Fees.
I had a client refinancing his home with me.
We had already locked his interest rate when he called and told me an online lender had quoted him an interest rate approximately 1% lower than the rate we had locked.
I was shocked.
A full percentage point is a significant difference.
I couldn’t understand how another lender could legitimately be pricing that far below us.
But rather than telling my client their quote couldn’t be real, I asked him to send me the estimate.
I wanted to see it.
When I reviewed it, I discovered something interesting.
The rate really was approximately 1% lower.
And the fees were approximately:
$21,000.
There was the rest of the story.
The lower rate wasn’t necessarily fake.
It was expensive.
Now, that doesn’t automatically make it a bad loan.
There are situations where paying discount points to obtain a lower interest rate can make financial sense.
But you have to do the math.
Ask:
How much am I paying to obtain this lower rate?
How much does the lower rate save me every month?
How long will it take those monthly savings to recover the additional upfront cost?
How long do I realistically expect to keep this mortgage?
That’s your break-even analysis.
If you’re paying thousands or even tens of thousands of dollars to reduce an interest rate and then sell or refinance before recovering that expense, the lower rate may not have saved you money at all.
My Two Cents
When someone quotes you a dramatically lower mortgage rate than everyone else, don’t immediately assume you’ve found the deal of the century.
Say:
“Great. What does it cost me to get that rate?”
Then ask for the Loan Estimate.
Look at the entire transaction.
What Should I Compare on a Loan Estimate?
When you’re comparing lenders, try to make the comparison as close to apples-to-apples as possible.
Look at:
- Interest rate
- APR
- Discount points
- Origination charges
- Lender fees
- Lender credits
- Mortgage insurance, if applicable
- Monthly principal and interest payment
- Total monthly payment
- Estimated cash to close
- Rate lock period
- Loan program and terms
And ideally, compare substantially similar scenarios at approximately the same time because mortgage pricing changes.
A rate without its cost is only half the information.
Are Online Mortgage Lenders Safe and Reliable?
An online lender can absolutely provide a good mortgage experience.
But the word “online” doesn’t tell me enough to determine whether I would trust someone with my mortgage.
I want to know:
Who is my actual mortgage advisor?
Who processes the loan?
Who underwrites it?
Who funds it?
How accessible are they?
What happens if there’s a problem?
How quickly are they currently closing?
How do they protect my financial information?
And perhaps most importantly:
How thoroughly was I actually pre-approved?
Which brings me to another transaction I’ll never forget.
Real Story #3: She Had a VA Pre-Approval Until the Online Lender Denied Her Three Weeks Into Escrow
I had a Veteran come to me after she was already under contract on a home.
She had been working with an online lender and had received a VA pre-approval letter.
She used that pre-approval to make her offer and successfully got into contract.
Then approximately three weeks into the transaction, the online lender denied her loan.
The issue involved income qualification requirements for the VA financing.
What concerned me was that the income issue was something that should have received careful attention during the pre-approval process.
Now my client had a much bigger problem.
She wasn’t sitting at home casually comparing mortgage companies anymore.
She had a house under contract.
She had contractual deadlines.
She had a seller waiting.
And she had just been told that the VA financing she believed she had been pre-approved for wasn’t going to work.
So we went to work.
Instead of asking:
“Why won’t the VA loan work?”
We asked:
“What financing CAN work for this buyer right now?”
We determined that she could qualify using FHA financing.
We asked the seller to extend the escrow to give us enough time to process the new loan.
Thankfully, the seller agreed.
We processed the FHA loan.
And my client bought her home.
But I love the second half of this story even more.
Approximately a year later, her income had increased.
We revisited her mortgage.
Her financial circumstances now supported VA financing, so we were able to refinance her FHA mortgage into a VA loan and eliminate the monthly mortgage insurance she had been paying on the FHA loan, subject to the terms and qualification requirements of the new financing.
She ultimately got the VA financing she originally wanted.
She just didn’t use it to purchase the house.
And that’s an important distinction.
FHA was the right solution for this particular buyer, but the best program depends on the borrower’s credit, down payment, income, property, and overall financial picture. FHA vs Conventional Loans: The Real Differences Every Homebuyer Needs To Know explains how these two common financing options compare.
How Good Is Your Mortgage Pre-Approval?
A pre-approval letter should mean something.
It should not simply be a piece of paper that allows you to make an offer.
No legitimate mortgage professional can guarantee final approval simply because you’re pre-approved. A purchase still involves the property, appraisal, title, updated financial information, underwriting requirements and other conditions.
But there is a difference between a thoughtfully reviewed pre-approval and a letter generated without adequately analyzing the borrower’s financial situation.
When I’m evaluating a borrower for pre-approval, I want to understand:
- Income
- Employment
- Credit
- Assets
- Debts
- Down payment
- Reserves
- Loan program requirements
- Potential underwriting issues
And if something doesn’t fit, I want to discover it before you’re emotionally attached to a house whenever possible.
That is one of the biggest values an experienced mortgage advisor can provide.
A strong pre-approval starts with a thorough review of your financial picture, not simply generating a letter. The Home Loan Pre-Approval Process Explained walks through what should happen before you begin making offers and why that preparation matters once you’re under contract.
Sometimes the Best Mortgage Strategy Is a Two-Step Strategy
My Veteran client’s story also illustrates something consumers don’t hear often enough.
The mortgage you use to buy your home doesn’t necessarily have to be the mortgage you keep forever.
The first objective may be obtaining financing that appropriately allows you to purchase the home.
Later, if your income, equity, credit profile, interest-rate environment or financial circumstances change, you can evaluate whether another financing strategy makes sense.
That doesn’t mean you should enter a mortgage assuming you’ll automatically refinance. Future rates and qualification are never guaranteed.
It simply means:
Don’t become so attached to one loan product that you lose sight of your actual objective.
For my client, the goal wasn’t really “get a VA loan.”
The goal was:
Buy the home.
FHA accomplished that at the time.
VA became an option later.
That’s mortgage strategy.
The same principle applies to timing the market. Waiting solely for a particular mortgage rate can have tradeoffs, which we explore in Why Waiting to Buy in 2026 May Be More Expensive Than Buying Now.
What Is a Portfolio Lender and When Might One Make Sense?
A portfolio lender generally keeps certain mortgages in its own investment portfolio rather than selling every loan through traditional secondary-market channels.
That may give the lender more flexibility to create its own criteria for particular portfolio programs.
Portfolio financing may be worth investigating for:
- High-net-worth borrowers
- Jumbo borrowers
- People with unusual income
- Self-employed borrowers
- Borrowers with significant assets
- Unique properties
- Financial situations that don’t fit neatly into traditional agency guidelines
But there’s an important misconception here too.
Portfolio does not automatically mean easier, cheaper or better.
It’s simply another potential lending tool.
What About Jumbo Loans?
Jumbo financing is another area where I encourage borrowers to shop intelligently.
Don’t assume the lender that’s most competitive on a $500,000 conventional mortgage will automatically be the most competitive on a $1.5 million jumbo mortgage.
Jumbo underwriting and pricing can vary considerably between lenders.
Banks and large mortgage banking companies can sometimes be particularly competitive in the jumbo space, while certain banks may also offer relationship pricing based on deposits or assets.
If you’re financing a higher-value property, compare lenders that have genuine strength in jumbo lending rather than assuming all mortgage companies price these loans the same way.
How Important Is Communication When Choosing a Mortgage Lender?
Extremely important.
In fact, I think consumers underestimate this more than almost anything else.
Mortgages involve people.
The buyer.
The seller.
Two real estate agents.
Escrow or title.
Insurance.
Appraisers.
Underwriters.
Processors.
Sometimes attorneys, accountants, financial advisors, builders or other parties.
There are deadlines.
There are documents.
There are questions.
Things change.
Communication keeps all of those moving pieces together.
When I read reviews of a mortgage professional, I don’t only look for people saying they received a great rate.
I look for words like:
Responsive.
Knowledgeable.
Explained everything.
Kept me informed.
Solved the problem.
Closed on time.
Because that’s what a mortgage experience actually feels like to the consumer.
Before You Apply for a Mortgage, Research the Person You’re Trusting
This is probably my biggest piece of advice in this entire article.
Before you give someone your Social Security number, credit information, income documentation, tax information, bank statements and details about your assets:
Look them up.
Google the mortgage advisor’s name.
Read their reviews.
Look at their professional history.
Look at their NMLS information.
How long have they been originating mortgages?
What do their past clients consistently say?
Does the person specialize in the type of financing you need?
Specialized programs can require very different knowledge from a standard purchase loan. For example, FHA 203k Loans Explained: How to Buy a Fixer Upper Without Extra Loans covers how buyers may finance an eligible home’s purchase and renovation through a single FHA mortgage.
Can you find evidence that they actually know what they’re talking about?
And then talk to them.
Do you trust this person?
Do they listen?
Do they explain things in a way you understand?
Do they answer your questions?
Do they return your calls?
Do they seem interested in understanding your financial situation, or are they simply trying to get an application?
Your mortgage application contains an enormous amount of private financial information.
Trust should be part of your lender comparison.
The Mortgage Company Matters, But So Does the Mortgage Advisor
Two loan officers working for the same company can create completely different experiences.
Technology matters.
Products matter.
Operations matter.
Underwriting matters.
Pricing matters.
But the person quarterbacking your transaction matters too.
An experienced mortgage advisor should understand guidelines well enough to anticipate potential problems.
They should know what questions to ask.
They should know when something doesn’t look right.
And when Plan A isn’t going to work, they should know whether there is a Plan B.
That’s what happened with my Veteran client.
The solution wasn’t figuring out how to force her into a VA loan she couldn’t qualify for at that moment.
The solution was knowing enough about other financing options to recognize that FHA could get her into the home.
Questions I Would Ask Any Mortgage Lender Before Applying
If I were interviewing someone to handle my own mortgage, these are some of the questions I would ask:
- How long have you personally been originating mortgages?
- What loan programs do you have access to?
- Who processes, underwrites and funds my loan?
- How thoroughly will my financial information be reviewed before you issue a pre-approval?
- How quickly are you currently closing purchase loans?
- How will you communicate with me throughout the process?
- Who do I contact if I have a question after normal business hours?
- What happens if the loan program you’re recommending doesn’t work?
- How is my personal financial information protected?
- Why are you recommending this particular mortgage for me?
- What does the interest rate you’re quoting actually cost me?
- What happens if an underwriting problem comes up right before closing?
Pay attention to how they answer.
You don’t need someone who makes everything sound perfect.
You need someone who understands how to navigate the transaction when it isn’t.
So, What Is the Best Type of Mortgage Lender?
After more than 25 years in mortgage lending, here’s my answer:
There isn’t one type of mortgage lender that’s best for every borrower.
A mortgage broker may be the right fit.
A mortgage banker may be the right fit.
A bank may have exactly the portfolio or jumbo program you need.
A credit union may offer an excellent solution.
An online lender may provide a competitive option.
The question isn’t simply:
“Which type of lender is best?”
It’s:
“Which lender, loan program and mortgage advisor are best equipped for my particular situation?”
I would evaluate the complete picture:
Loan program + rate + costs + experience + communication + trust + execution.
Because my three client stories all teach essentially the same lesson in different ways.
One borrower found an attractive down payment assistance program, but when the lender couldn’t execute quickly enough, the incentive stopped being the most important consideration.
Another borrower found an interest rate a full percentage point lower, but the loan came with approximately $21,000 in fees.
And another borrower had a VA pre-approval until the lender denied the financing three weeks into escrow. What ultimately saved the purchase wasn’t a lower rate. It was identifying another loan program that worked.
That’s why I believe choosing a mortgage professional requires more than comparing numbers on a screen.
You’re choosing the person and the team you’re trusting to get you home.
And when something unexpected happens, that’s when you’ll really discover what your choice was worth.
❓FAQs About Choosing a Mortgage Lender
Neither is automatically better. A mortgage broker may have access to multiple wholesale lenders, while a bank may offer portfolio programs, relationship pricing or other proprietary options. Compare the specific loan, costs, expertise, communication and ability to execute your transaction.
Credit unions can offer competitive mortgage rates and fees. However, product selection and underwriting requirements vary considerably. Make sure the credit union offers a program appropriate for your financial situation.
There isn’t one lender category that will always have the lowest cost. Compare actual Loan Estimates, including interest rate, APR, discount points, lender fees, lender credits, mortgage insurance when applicable and total cash to close.
Sometimes. Sometimes not. Mortgage pricing depends on the specific lender, loan program, borrower profile, property, market conditions, points and other factors. Compare actual offers rather than assuming one lender type is automatically cheaper.
Not necessarily. Find out what the rate costs. Compare APR, discount points, lender fees, credits, monthly payment and cash to close. Also consider the lender’s experience, communication, loan program and ability to close your transaction successfully.
In my opinion, absolutely. A purchase loan must operate within a real estate transaction with contractual deadlines. The lender’s ability to communicate, underwrite the loan accurately, order and manage the appraisal process, resolve problems and close on time can be extremely important.
Very. The mortgage company provides the infrastructure, products and operations, but your individual mortgage advisor is often the person coordinating your financing, explaining your options and helping navigate problems.
Ask what was actually reviewed before the letter was issued. A thorough review of income, employment, assets, debts, credit and applicable loan-program requirements can identify potential issues earlier in the process. Final approval still depends on underwriting and transaction-specific requirements.
Amy’s Final Two Cents
If you remember nothing else from this article, remember these five things:
1. Don’t shop by interest rate alone.
2. Don’t assume a special mortgage program is valuable until you know you actually qualify for it.
3. A pre-approval is only as strong as the analysis behind it.
4. Communication and execution matter tremendously once you’re under contract.
5. Research the mortgage advisor you’re trusting with your financial information and your home purchase.
Ask questions.
Compare your options.
Read reviews.
Understand the costs.
And choose someone you trust.
Because when everything is going smoothly, the differences between mortgage lenders may not seem particularly important.
When something goes wrong, they can become very important very quickly.
About Amy DeBusk
Hi, I’m Amy DeBusk. I’ve spent more than 25 years helping homebuyers, homeowners, and real estate investors navigate mortgage financing, and there is one thing I believe just as strongly today as I did when I started:
Who you trust with your mortgage matters.
Amy DeBusk Home Loans is powered by loanDepot, a mortgage banker, which gives my team and me access to a large range of loan programs, competitive interest rates, and the lending infrastructure to help manage your mortgage from application through closing.
But products and interest rates are only part of what I believe makes a great mortgage experience.
We are very hands-on.
I have an experienced team working alongside me, and we communicate throughout the process, pay attention to the details, anticipate potential issues, and work together to provide the kind of world-class customer service I would expect if it were my own mortgage.
And that’s actually how I approach the recommendations I make.
When I’m helping you make a mortgage decision, I think about what I would recommend if you were a member of my own family or if this were my own mortgage.
Is this the loan I would choose? Does the payment make sense? Are we looking at the costs as well as the interest rate? Is there another option we should consider? Does this financing support what you’re trying to accomplish financially, both today and in the future?
My clients’ financial well-being is at the heart of what we do every day.
And you don’t have to take my word for it.
You can read our 132 five-star reviews on Google and Yelp and see what our clients have said about their experiences working with us. I’m incredibly proud of those reviews because so many speak to the things that matter most to me: communication, knowledge, responsiveness, problem solving, and making a complicated mortgage process easier to understand.
We also offer a wide range of financing solutions for different buyers, investors, and properties, including first-time homebuyer programs, Conventional, FHA, VA, Jumbo, down payment assistance, self-employed bank statement loans, DSCR and investor loans, renovation financing, and other specialty mortgage programs.
My philosophy is pretty simple:
I don’t want to simply give you a mortgage. I want to help you understand your options and make a mortgage decision you feel confident about.
Because ultimately, this isn’t just about getting a loan approved.
It’s about helping you make a smart financial decision, protecting your interests throughout the process, and making sure you have an experienced team standing beside you all the way to the closing table.
If you’re considering buying, refinancing, investing, or simply trying to understand what options may be available to you, I would be happy to have a conversation.
NMLS 281056 | Licensed in CA, TN & TX
AmyDeBuskHomeLoans.com
Schedule a conversation: TalkingWithAmy.com
Individual client stories have been shared without identifying information and are intended to illustrate mortgage concepts and experiences. Individual results vary. Refinancing may involve closing costs and qualification requirements and is not appropriate in every situation. Loan programs, rates, terms and eligibility requirements are subject to change. All loans subject to approval. Equal Housing Lender.
