There was a time when most homebuyers obtained their mortgage loans through their banks or credit unions. Today, however, there are a number of additional home-financing providers.

Which one is right for you? Let's take a look at the options.

Mortgage banks

Benefits of a mortgage bank:

• Reliability: You probably know and trust your local mortgage bank. It is regulated by state and federal agencies and likely has strong ties with your community.
• One-stop shopping: You deal directly with the source of your loan.
• Savings: As the loan originator, a bank may save you money in the loan process and/or offer you better terms based on your total assets on deposit with the bank.
• Speed: A bank also may process your loan faster than other providers.

Risks of a mortgage bank:

• Limited choice: Mortgage bankers only offer their own programs. To comparison shop, you will need to speak with several lenders.

Mortgage brokers

Benefits of a mortgage broker:

• Variety: By shopping across a range of different programs and lenders, a mortgage broker may find you a better fit than a mortgage bank.
• Qualifying: A mortgage broker can best steer you to the national or regional lenders that are most likely to accept your application based on your financial and personal information.
• Savings: You may get a more favorable loan rate.
• Speed: A broker saves you time shopping for a loan.

Risks of a mortgage broker:

• Hidden costs: Some mortgage brokers attempt to increase their profit by writing hidden costs into your loan. Best hedge: know the loan process and ask questions.
• Professional oversight: Unlike mortgage bankers, mortgage brokers are not subject to licensing and regulation in all states.