Mortgage brokers are third parties who coordinate with multiple lenders to find borrowers the ideal loan. By doing all the legwork for them, borrowers can save both money and time during the mortgage process.
Mortgage brokers can make it simpler to select a loan, as they know which lenders offer the most competitive rates and products. However, not all brokers work with every lender; thus, make sure you find one who has connections to various loan sources.
Experience: They specialize in the mortgage industry and often provide better loans than you could find on your own. Plus, they may recommend lenders who are more accommodating with credit scores, down payment amounts or specific types of properties.
Referrals: Ask past clients for contact information so that you can check on the broker’s communication, organization and problem-solving skills (or lack thereof). It can be invaluable to check these references for feedback regarding the broker’s performance in these areas.
What lenders do they work with?
They can refer you to private lenders who don’t deal with the public, giving you access to mortgages you wouldn’t otherwise find. This can be especially useful if you want to take advantage of government programs offering low interest rates or down payments for those with bad credit histories.
What Fees Do Brokers Charge?
In general, brokers charge between 1%-2% of the loan amount as a fee. This can either be paid upfront or rolled into the loan. It is wise to know what this fee will be before signing on with any broker – if possible – so that there are no surprises later on.
Brokers can also help you avoid costly missteps. They may suggest lenders who are more accommodating with your credit history or down payment amount, or whose home-buying goals align with yours.
They can assist you in finding a lender who will work with you if your income is irregular or your credit score doesn’t permit access from mainstream lenders. They may refer you to someone specialized in certain property types or more willing to assist self-employed borrowers.
What products do they provide?
Mortgage brokers offer a range of solutions, from traditional loans to specialized home-buying tools. Plus, they can assist in determining if you qualify for federal or state government assistance programs.
Are They Licensed?
To confirm a broker’s license, check with your state regulator and Nationwide Mortgage Licensing System & Registry. These sites can help verify the broker’s credentials and whether there have been any disciplinary actions taken against them.
As a first-time homeowner, it’s wise to meet with several mortgage brokers in person. This will give you an overview of their working methods and gauge how attentive they are to your requirements.
When looking for a mortgage, it’s essential to remember that this process can be emotional and your decision will have consequences. Selecting an experienced broker who has your best interests at heart and who you can trust is key; do your research beforehand so you don’t end up disappointed later on.
