Can A Mortgage Broker Help You? 6 Vital Points For A Better Experience

Is it worth using a mortgage broker

Can A Mortgage Broker Help You?

There are many reasons why you may be considering the use of a mortgage broker.

Perhaps you need to get a loan quickly and need the cash now. Or perhaps you want to refinance your current mortgage, but don’t know how much you can qualify for or if you even qualify in the first place.

Or, maybe you are interested in exploring the possibility of buying a second home or an investment property, but just do not know how to go about doing so.

Whatever the reason, if you are considering using a mortgage broker, there are some things you should know before you decide.

What exactly is a mortgage broker?

In essence, a mortgage broker is someone who helps a borrower to get a loan.

The exact role a broker will play varies by lender and institution, but typically they will: obtain a loan, submit it on behalf of the borrower, and collect a portion of the loan proceeds.

Although some lenders allow their brokers to act as an actual representative of the bank, most prefer for the broker to work solely as an intermediary. This means that a broker organises the loan amount directly from the lender and acts as a third party between the borrower and lender.

Brokers are also responsible for ensuring the accuracy of paperwork and collecting payment from the borrower on behalf of the bank.

Mortgage brokers get commissions

So, now that you know what a mortgage broker does, how does he/she make money? Most professional brokers earn a small commission on each loan they secure.

In most cases, the portion of the commission is given to the broker, while the remainder is given to the borrower. The lender has no obligation to accept a loan from a broker, so most mortgage brokers have several lenders they work with on a regular basis. The commission is not charged back to the borrower.

In other words the mortgage brokers services are free.

A broker can help with application fees and down payment

Using mortgage brokers will save you time and money.

When you apply for a mortgage through a mortgage company or broker, you will be responsible for paying application fees, title and processing fees, and down payment fees.

Many people find it difficult to remember all these different payments every month, but mortgage brokers make it easy by making sure you are cognisant of all fees and charges, if applicable.

Getting the best mortgage rates and terms

Another advantage to using a mortgage broker is that you can usually get a good deal on your home loan. When you deal directly with a lender, you may not get the best mortgage rates and terms.

Often, mortgage companies will approve you for a certain amount of money and then require you to pay a hefty insurance premium. A broker, on the other hand, is free from such worries because he knows what the market will do.

What are some disadvantages to using mortgage brokers?

In addition to the above-mentioned advantages, there are also some disadvantages to choosing a mortgage broker. Sometimes, mortgage brokers try to sell you something else.

You will often have to accept products you don’t really need. Also, some brokers charge fees and they can be expensive.

One last disadvantage to mortgage brokers is that they might try to sell you a product that doesn’t really belong to you. For instance, they might claim that you can get an FHA loan for a certain price.

mortgage broker help youThis isn’t necessarily true because the FHA loans are usually insured and regulated by the federal government. If you’re looking to purchase a house through a broker, you must do your research first. You should also ask other homeowners who have used brokers about their experience.

The cheapest way to find out about the quality of mortgage deals offered by different lenders is to go online and use a mortgage broker comparison or review site.

Is it worth using a mortgage broker?

If you’re planning to buy a new home, then a mortgage broker might be a good idea. Otherwise, it’s not necessary.

Make sure you know what you want before you go to a mortgage broker, so that you’ll be better prepared when he shows up at your office or home. Then you can make an informed decision about whether to use him.