Millions of home buyers use a mortgage broker when trying to find the best mortgage terms and prices. However, in the aftermath of the real estate market crash in 2008, the business practices of brokers came under scrutiny.
The question of whether they act in the best interests of customers was raised and since then many changes in the industry have been made to help the consumer. A mortgage broker will have knowledge and financial connections that you’re just not privy to.
Working with an experienced, knowledgeable mortgage broker can make it easier to find the right mortgage for your needs. We’ve examined the benefits and drawbacks of a mortgage broker and have those details up next.
Why you Need a Mortgage Broker
Trying to find the right mortgage for your needs can be difficult when you go at it alone. Today’s extensive range of mortgage products means customers have a lot to choose from. Sometimes too many choices can be mind-boggling.
You might end up spending hours and hours trawling through different companies’ mortgage offers and be more confused than when you started. Instead of trying to decipher the financial jargon that lenders might throw at you, you can have a mortgage broker do it for you so you can move forward easily.
The Advantages of Having a Mortgage Broker
The Broker Can Save You a Lot of Legwork
Mortgage brokers regularly have contact with a wide range of lenders, some of whom you may not even know. A broker will also steer you away from other lenders having hidden onerous payment conditions in their mortgage contracts.
That said, doing some of your own research before meeting with a broker is helpful. A simple way to get a fast understanding of the average rates available for the type of mortgage that you are applying for is to check online prices, then use a mortgage calculator.
Tools like this will allow you to quickly compare the rates and give you additional knowledge when assessing the credibility of a mortgage broker.
The Broker has Access to Lenders
Many lenders deal exclusively with mortgage brokers and rely on them to be the gatekeepers to get sufficient customers to them.
You may not be able to directly call a few lenders to get a retail mortgage. Because of the volume of business produced, brokers may also be able to get special rates from lenders that may be lower than you would get along.
The Broker Can Manage Your Fees and Helps You Get the Best Rates
Many different forms of fees, including origination fees, loan fees, and valuation fees, may be involved with taking on a new mortgage or partnering with a new lender. In some cases, mortgage brokers will make lenders waive any or all of these fees, which can save you hundreds or thousands of dollars.
A mortgage broker is offered commercial loans from lenders, and can, therefore, offer the best rates on the market, typically lowering the total loan cost to the client. A credible mortgage broker must explain how their services are paid for, as well as explaining the overall cost of the loan.
The Broker has the Flexibility and Expertise to Meet your Needs
A mortgage broker can guide the customer in any scenario, manage the transaction, and smooth out any bumps along the way. When borrowers have credit problems, for example, the broker should know which lenders are providing the best deals to meet their needs.
Borrowers who find that they need bigger loans than their bank will benefit from the experience and skill of a broker to get funding successfully.
The Broker Helps You Save Time
You only need to fill out one application from a mortgage broker, rather than filling in forms for each specific lender. Your mortgage broker will provide a detailed overview of any approved loans, directing you to the details that best reflect cost disparities, with current rates, points, and cost closures expressed on each loan.
The Broker can Provide you with Personalized Advice for Mortgages
The differentiating factor when selecting a mortgage broker is personalized service. Your mortgage broker will be expected to help smooth the way, be available to you, and guide you during the closing process. The broker will know what is right for you and how you can get the best out of your mortgage.
Check the mortgage broker’s credentials and experience. Ask for references and depend on your solicitor, accountant, real estate agent, or financial advisor for referrals. Choosing a good mortgage broker depends on you. But once you’ve nailed down one, they should be able to help you get into your dream home fast.