Buying a home is an exciting but overwhelming process, and you'll likely encounter several decisions to make along the way. One of the most important choices is selecting a mortgage lender. Many home buyers turn to their real estate agent for recommendations, and often, the realtor will suggest using their in-house mortgage lender. While it might seem like a convenient and straightforward option, it's not always the best one. Here's why you should shop around for a mortgage loan instead of using your realtor's in-house mortgage lender.

1. Limited Options

A realtor's in-house mortgage lender will only have a limited number of loan options available. While these loans may be suitable for some buyers, they might not be the best fit for you. Additionally, the in-house lender may be incentivized to push certain loan products or steer you towards particular financing options that aren't the most favorable for you.

2. Higher Costs

Using a realtor's in-house mortgage lender can lead to higher costs in the long run. Often, these lenders offer loans with higher interest rates and fees, which can add up over the life of your mortgage. By shopping around for a mortgage loan, you can compare different interest rates and fees to find the best deal for you.

3. Lack of Transparency

Using an in-house mortgage lender can sometimes lead to a lack of transparency in the loan process. Since the lender works for the same company as your realtor, there may be a conflict of interest. This can make it difficult to get honest and unbiased advice on the best loan options for you. By shopping around for a mortgage loan, you can find a lender who will give you transparent and honest advice about your financing options.

4. Missed Opportunities

If you choose to use your realtor's in-house mortgage lender, you might miss out on better financing opportunities that could save you money. By shopping around for a mortgage loan, you'll have access to a wider range of lenders and loan products, which could lead to a better interest rate or more favorable loan terms.

5.  Undisclosed kickbacks

A Realtor may be receiving undisclosed kick backs for referring you to the in-house mortgage lender.  This can be in the way of dividends or bonuses.  These kickbacks have to come from somewhere, and typically it is paid out by increasing the interest rates or having higher fees.

In conclusion, using your realtor's in-house mortgage lender might seem like a convenient option, but it's not always the best one. By shopping around for a mortgage loan, you'll have access to a wider range of lenders and loan products, which can lead to better loan terms, lower costs, and greater transparency. Don't be afraid to shop around and compare mortgage lenders to find the best deal for you.