In most cases banks are going to have 2 separate divisions when it comes to mortgages, retail and wholesale. In many cases they actually compete against one another to see which can generate the most business. Since they are targeting different audiences they have different product lines, rates and fees. Since the retail branches are targeting the general public they are given typical retail rates. The wholesale division has access to better pricing that they offer to brokers since they are competing with other banks, and lenders who are also offering wholesale pricing.

It's pretty common that your mortgage broker can give you a better rate than if you went with the lender directly. Mostly, it comes down to how much the broker is trying to charge you. As a general rule, a retail bank will charge you 1.75-2.25 points. (Either through Yield Spread Premium or paying the points up front) If your broker is willing to take less than that, the broker will generall beat the lender on the lenders own programs.

Do you have hard to prove income, bad credit, or little or no down payment? Many people choose to work with a mortgage broker because a broker has access to lenders with loan programs tailored to the customer's needs. Mortgage brokers can also offer several loan options, allowing you to choose the mortgage that is right for you.

As opposed to loan officers from the neighborhood banks, almost all mortgage brokers are compensated only if the home buyer is successful at the purchase. This gives brokers an incentive to take an active role to solve any problems that may arise during the transaction.