When you have already narrowed down the search to find the house of your dreams, and now you just have to decide on the best mortgage option for you, you want to get the keys as soon as possible. However, it is understandable that you may have many doubts and questions about it since you possibly have no experience or up-to-date knowledge in this field.
The best solution in such a situation is to find a specialized expert, like The Mortgage Broker, who will help you to make this difficult choice. You may have never heard about such a profession before, so we have prepared a list of four facts that should be helpful in understanding it better.
1. What does a mortgage broker do?
A mortgage broker works as a middleman between you and the lenders you are supposed to choose from. Their main task is to cooperate with several banks on your behalf, so as to receive the loan with the most favourable terms and lowest rate that is perfectly adapted to your individual needs. It can seem as if a mortgage broker was almost the same as a loan officer, but these professions are different from each other, in fact.
Generally speaking, mortgage brokers are regulated and licensed specialists who have developed an excellent database of lenders they work with. They can take care of all the time-consuming legwork, including the collection of necessary documents, pulling the credit history, and checking your employment and income status. Having all this information, they are able to quickly apply for loans on your behalf with many potential lenders.
When you decide on a particular loan from the list, your mortgage broker will contact the bank’s underwriting department, your real estate agent, and the closing agent, so that the transaction could run smoothly.
2. What is the payment that a mortgage broker gets?
Like any other sales professional, a mortgage broker will charge a commission for their work. Normally, you will get a “loan origination fee” that constitutes around 1% of the loan amount and should be paid by the borrower at closing. However, it happens that mortgage brokers negotiate cost-free loans that will not require extra money. In this case, the broker will get the payment from the lender after closing the loan.
It may seem beneficial, but you must keep in mind that reducing expenses in this way means that you will have to cover a higher interest rate, which can get more expensive as time goes by.
3. Why should I cooperate with a mortgage broker?
One of the main reasons to use the help of a mortgage broker is the fact that they are like your loan concierge and do all the hard and time-consuming work for you. They take care of the loan applications, look for the most beneficial rates, negotiate terms on your behalf, and lead all the process up to approval.
Usually, mortgage brokers cooperate with numerous local, regional, or even national reverse mortgage lenders, and they can use their connections to get some loan fees lowered for you. Choosing such a specialist, you will be provided with one-to-one attention and high accessibility that could be hard to get if you were working with a large bank loan officer.
If your time is really precious for you, you will undoubtedly appreciate working with a mortgage broker. Namely, it would take you many hours to apply for various loans and take care of the back-and-forth communication, which is always associated with underwriting the loan. What is more, you would have to make sure that the transaction stays on track. With the help of an experienced expert, you will be saved from all that hassle.
4. How shall I select the best mortgage broker for me?
If any of your relatives or friends have ever used the services of a mortgage broker, you can ask them for referrals. However, you should not just get the name – ask about the quality of service, the communication fluency, the approach to clients, and the knowledge and experience level.
Apart from the people you know well, you can ask your real estate agent for further referrals. They should be able to provide you with at least a few names of brokers they have successfully worked with and whom they consider to be genuinely trustworthy. It happens that an estate company may offer you their in-house mortgage broker as an element of their range of services; however, you are never obligated to work with this particular specialist or company.
In order to select a mortgage broker carefully, it is advisable to interview at least three or four people to see how a particular mortgage broker is able to reduce the formalities, how experienced they are, and what is the exact scope of their services. Also, it is crucial to check if your local professional licensing authority approves them. Apart from that, reading online reviews can also be helpful, as you can compare what other people say about the broker that someone else has already recommended to you.
When you choose a mortgage broker carefully, they will provide you with enormous help in making your dream home one step closer to you. It is always a good idea to cooperate with a competent person whose knowledge and experience can be used on your behalf!