Do you cringe when you hear the term mortgage broker? You aren’t alone. Many people have bad connotations of mortgage brokers, but they don’t deserve this bad rap. Mortgage brokers are a great way to help you get the best loan for your needs.
Below we discuss the benefits of using a mortgage broker so that you can see how it may relate to your situation.
You Have Access to More Loan Products
A mortgage broker takes the legwork out of shopping for a mortgage. The mortgage broker has relationships with hundreds of lenders. They use these relationships to match you up with lenders after you complete a loan application.
If you were to shop for the right lender on your own, it would require multiple loan applications, phone calls, emails, and paperwork shuffling on your end. When you use a broker, they do all of the legwork for you. After you submit the application and your income/asset documentation one time, the broker does the rest. They can filter your information out to the lenders that they know will fit the bill and get quotes for you in a short amount of time. Sometimes you may even get quotes from lenders that you didn’t know had the program you needed.
You Have a Consultant at Your Disposal
When you shop for a mortgage directly through a bank, they want you to get the loan from them, so they try to sell you on it. A broker wants you to get a mortgage, but not any particular one. The broker gets paid as long as you take a mortgage from someone. This makes the broker a little less biased than a banker might be. This way you can get personal advice regarding one of the largest investments you may make in your lifetime.
A broker will discuss your desires including the rate, term, and product. The broker may also discuss your short and long-term goals to help you determine which loan product works the best for you. Since the broker has access to so many loans, they can broaden the horizons in what they offer you, helping you to get advice and the best loan product for your situation.
You Save Time
Like we said above, the mortgage broker does all of the work. You apply for the loan one time and they do the rest. This could save you hours of shopping around for a mortgage. If you were to do it yourself, you would spend hours scouring the internet, applying for loans online or calling lenders and asking questions. With a broker, you don’t have to do any of that. The broker either already knows the information or they will get it for you, saving you a lot of time and headaches.
You Get Personal Service
When you apply for a loan with a bank, you often become a number in a sea of other clients. With a mortgage broker, they take the time to get to know you. This is the only way they can provide you with the advice and proper loan program.
You can expect to sit down and discuss not only the home you want to buy/refinance, but your financial goals for the future, as well as your plans for the future. For example, is this a short-term purchase or is this your ‘forever’ home? Do you have a job with stable income or does it vary? These are questions the broker needs answers to in order to provide you with the proper loan.
You May Save Money
This is where many people have bad connotations of mortgage brokers. They think that you pay more for their services. In reality, you may pay less for your loan because the mortgage broker has the opportunity to shop around with different lenders.
Mortgage brokers also get wholesale pricing, which means you may be able to snag a lower interest rate than you would if you went directly through a lender or bank. The mortgage broker receives payment from the funding lender. The broker must disclose to you how much the lender pays them and how it affects your cost for the loan.
The bottom line is that mortgage brokers offer a great service if you use it right. Take the advice the broker provides and see if the loan fits within your budget and satisfies your long-term goals. The broker can save you time, money, and headaches that shopping around for a loan can cause.