If you’re planning to buy your own home soon, chances are you will need to acquire a mortgage. You have two existing options in doing so. One, deal with banks and other financial institutions directly. The other option is hire a mortgage broker to do the work for you. Here is what you need to know about them and why you should consider in hiring one.
When looking for a mortgage, a lot of real estate buyers research the services offered of a mortgage broker to ensure that they will be getting the best rates. Working with an experienced, competent mortgage broker can make your mortgage search much easier. A mortgage broker can help you find the right mortgage in a short amount of time.
WHAT IS A MORTGAGE BROKER?
A mortgage broker is a professional agent who acts as a middle person between the lenders and borrowers. Mortgage brokers earn by broker fees that fall around 1% to 2% range per loan. To make it easier to understand, think of them as a recruiter. They coordinate with people interested in securing a home mortgage and deal them up with a lender.
Their work includes knowing you and your financial capacity, calculating what rates you could be approved of, sending your application forms and discussing with you on-going applications. There are circumstances that mortgage brokers act as a middle person between buyers and big banks. More often than not, mortgage brokers can secure you a better rate than if you go to the big banks yourself.
- Saves time and effort
A broker saves you the time and headache from having to call up dozens of home lenders and compare all their mortgage rates. Sure you can apply mortgages by yourself. However, the problem with this is it can really be long and tedious. Whether you have a 9 to 5 job or managing your own business, mortgage applications can easily take a day or more. With a mortgage broker, all of this legwork is done on your behalf. Moreover, a broker also can help you get away from illegitimate home lenders trying to scam prospect buyers.
- Mortgage broker have more access to lenders
Mortgage brokers have access to a lot of lenders, even those you do not know about. A number of lenders rely to mortgage brokers to bring them good clients. There are instances that you cannot deal with lenders without a help of a mortgage broker.
Bear in mind is that every time you apply for a home mortgage and was disapproved, regardless of the reason, it leaves a mark on your credit history which is bad for your profile. With that being said, mortgage brokers use specialized software to gather the latest loan information offered by lenders and automatically match it to your financial situation and desired rates. The borrowing power of the clients becomes very clear in a short amount of time. This reduces the chances of being turned down for a home mortgage. No rejection equals to no heartbreak for you and your credit history.
- You May Save Some Fees
In acquiring a mortgage, several fees are involved. This includes original fees, application fees and appraisal fees. With the help of a mortgage broker, some, if not all of these fees can be waived thereby saving you thousands of dollars.
- They are more accessible than bank loan offices
Just like other agents, a mortgage broker doesn’t get paid unless the deal is closed. Thus, mortgage brokers tend to be more accessible and accommodating to potential home buyers than bank employees. Should you have any questions along the process, it is a lot easier to approach them.
In the end, whether you plan on hiring a mortgage broker or not, be wise in making decisions about your home mortgage. A small difference in monthly rates can mean saving thousands of dollars over a ten to thirty-year home loan.