Mortgage Broker vs Bank in North Charleston, SC — Why a Broker Wins
Home Loans Inc. is a veteran-owned independent mortgage broker in North Charleston, SC. When you apply for a mortgage, you have four choices: an online lender, a bank or credit union, a correspondent lender, or a mortgage broker. Only a broker is legally required to work in your best interest. Here is exactly what that means for your rate, your fees, and your closing experience.
The Four Types of Mortgage Originators — And What They Actually Are
Understanding who you are dealing with is the first step in getting the best mortgage.
Online lenders: high volume, low service motivation. Their loan officers are compensated to get you committed regardless of outcome. Many loans originated by online lenders do not close - and because you were never going to refer them anyway, there is no consequence for them when yours doesn't. We refer to them affectionately as headset jockeys.
Banks and credit unions: limited to their own loan products. Loan officers at depository institutions are typically entry-level order takers - base salary plus small commission, no motivation to shop for your best rate because there is nothing else to shop. They represent their employer, not you. Think of it this way: do you want fries with that mortgage?
Correspondent lenders: retail locations that only originate mortgages. More experienced than banks, slightly better customer service, but still limited to the loan products of their single lending source. The most expensive option in the market - averaging 3.79% of the loan amount in origination cost according to the Mortgage Bankers Association.
Mortgage brokers: independent intermediaries who represent you - not a lender. Regulated by the Department of Consumer Affairs, not the banking commission. Required by law to work in your best interest, exactly like your Realtor. We shop your loan across 54 wholesale lenders simultaneously to find your best rate and terms.
How a Broker Saves You Money — The Numbers
The financial case for using a mortgage broker over a bank or correspondent lender is straightforward and well-documented.
The maximum a mortgage broker can earn on a loan is 2.75% of the loan amount - regulated by federal law. The average retail mortgage originator earned 3.79% last year according to the Mortgage Bankers Association. That is 37% more expensive than a broker. On a $350,000 loan the difference is approximately $3,640 in origination costs alone.
Home Loans Inc. charges zero lender closing costs. No origination fees. No underwriting fees. No processing fees. Closing costs on a brokered loan are thousands of dollars less than the same loan at a retail bank or correspondent lender. This matters to your Realtor too - brokered loans have less fees, less financial risk in the transaction, and cleaner closing cost structures.
Beyond fees, wholesale rates are significantly lower than retail rates. Lenders compete to earn your business through brokers - they know we have 54 investors to choose from. That competition drives your rate down. We see this directly when we compare wholesale rate sheets against the retail sheets of major lenders.
The Legal Difference — Who Does a Broker Work For?
This is the most important distinction between a broker and every other mortgage originator - and most borrowers have no idea it exists.
A mortgage broker is a fiduciary - legally required to work in your best interest, similar to your Realtor. This is regulated by the Department of Consumer Affairs in South Carolina. A broker cannot steer you toward a loan that pays more unless it genuinely serves your needs.
A bank loan officer, online lender, or correspondent lender is a W-2 employee hired to improve their company's bottom line. They have ethics to uphold and most act with integrity - but they are not legally bound to put your interests above their employer's. They have managers to please, production goals to hit, and loan products that may not include the best option for your situation.
Federal law also requires that broker compensation be exactly the same with every lender - meaning Jason Sharon earns the same whether he places your loan with Lender A or Lender B. There is zero financial incentive to steer you anywhere other than the best rate available.
The only way to earn your repeat business and referrals is to get you the best loan.
How Brokers Save Lenders Money — and Why That Creates Lower Rates
Understanding why wholesale rates are lower than retail rates helps you understand why the broker model consistently outperforms direct lending on price.
When you go directly to a retail lender - whether a bank, online lender, or correspondent - that lender handles origination, processing, underwriting, funding, and compliance in-house. Significant staffing and overhead costs are built into your rate to cover that full stack.
When you work with a broker, the origination and processing tasks are completed by the broker. The wholesale lender handles only underwriting and funding. The broker just cut the lender's compliance and staffing bill roughly in half. Those savings get passed to you through lower wholesale rates - which is why the same loan at wholesale is consistently cheaper than at retail. This is not a marketing claim. We see it every day when we pull rate sheets.
The Stats — What Choosing a Broker Actually Saves You
The data on broker vs bank savings is clear.
25% of all mortgage transactions in 2023 were originated through a mortgage broker. The average broker client saved $9,400 over the life of the loan compared to using a retail lender - through lower rates, lower fees, and better loan structure.
On a $350,000 30-year mortgage at a rate that is 0.25% lower than what a bank would have offered, the lifetime savings in interest alone exceeds $16,000. Add zero lender closing costs vs a bank's origination and underwriting fees, and the total financial advantage of using a broker becomes difficult to argue against.
Home Loans Inc. has 420+ five-star reviews from Lowcountry borrowers who chose the broker model. BBB A+ accredited. 11 years of experience. Veteran-owned. The combination of lower rates, zero lender fees, and a fiduciary obligation to you is why we consistently outperform every other channel.
Virginia Disclosure
Virginia Borrowers: Refinancing your existing mortgage loan may reduce your monthly payment, but may result in higher total finance charges over the life of the loan. Home Loans Inc. | Virginia License MC-7017 | NMLS #1728740 | nmlsconsumeraccess.org
Q: Can a broker really get me a lower rate than my bank?
A: Yes - in nearly all cases. Wholesale rates that brokers access are consistently lower than the retail rates banks offer because brokers handle origination and processing, cutting the lender's overhead roughly in half. Those savings are passed to you. We see this every day when we compare our wholesale rate sheets against the published retail rates of major lenders.
Q: How does a mortgage broker get paid?
A: From the lender - based on a highly regulated compensation agreement similar to a finder's fee. In South Carolina, we are required to disclose exactly what we earn on your loan. Federal law requires our compensation to be the same with every lender - meaning there is zero financial incentive to steer you anywhere other than your best rate. Try asking a bank to show you their gross profit on your loan.
Q: What is the difference between a broker and a correspondent lender?
A: A correspondent lender originates and closes the loan in their own name then immediately sells it to an investor. They are limited to one source of funds and typically charge the highest origination costs in the market - averaging 3.79% of loan amount according to the Mortgage Bankers Association. A broker shops your loan across 54 wholesale lenders simultaneously and charges a maximum of 2.75%.
Q: Is a mortgage broker regulated?
A: Yes. In South Carolina, mortgage brokers are regulated by the Department of Consumer Affairs - not the banking commission. We are held to a fiduciary standard requiring us to act in your best interest, similar to a Realtor. Our NMLS number is 1728740 and you can verify our license at nmlsconsumeraccess.org.
Q: What if I have a relationship with my bank - does that help?
A: It might get you slightly faster service on the application - but your bank relationship does not give you access to other lenders' rates or loan products. A broker gives you access to 54 lenders simultaneously. The loan that is best for you may be with a lender you have never heard of - and you will never know that if you only ask your bank.
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COMPANY
NMLS: 1281448 | COMPANY NMLS: 1728740
Home Loans Inc: Jason Sharon, Mortgage Broker |
2557 Ashley Phosphate Rd,
North Charleston, SC 29418 |
(843) 569-7283 | www.homeloansinc.com
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