What is a Morgage Broker?
If you're shopping around for a new home, you know the time is going to come when you have to apply for a mortgage. Many people look to get pre-approved before they even begin their search, but even then, they must still find the best mortgage rate and go through the process. For many people, dealing with banks or other lenders is daunting and unappealing, so they turn to mortgage brokers to help them along.
Mortgage brokers are essentially middlemen or liaisons between the prospective homeowner and the lender. Mortgage brokers know the industry intimately and work directly with both the lender and borrower to get the borrower approved at the most favorable mortgage rate. Mortgage brokers can be used if you're buying a home for the first time, or if it's time to refinance your current home.
Once the mortgage broker and borrower agree to work with each other, the mortgage broker will gather all the necessary information to proceed. Mortgage brokers need information like income, assets and debts to figure out your ability to get a mortgage for your home. Once you provide all the information that's required, you'll know if you qualify for a mortgage or not. Mortgage brokers know their job and will do their best for you, but they can't help you get a mortgage if the numbers just don't make sense. If the numbers do work out, the mortgage broker will give recommendations on the most logical loan amount, the mortgage type and other factors that are important to the deal. You'll still have the final say on the mortgage details, you'll just have some expert advice to help guide your decision.
After all the paperwork is figured out, mortgage brokers get to work finding the best possible mortgage rate and term for the borrower. This is the area where mortgage brokers earn their money, because they can shop around and have contacts and access to several different lending institutions. Not all mortgage brokers have access to all lenders, and the number will vary, but they will still get you farther along than you could get by yourself. Once the process is started, the mortgage broker will work with you until the deal is closed.
It's a mortgage broker's business to know where all the lowest mortgage rates are, and how to get them for each client. Hiring mortgage brokers essentially take a lot of the work and responsibility off your plate during an already complicated process. Mortgage brokers know what questions to ask and when, and they are skilled in the art of mortgage negotiation. You may not know if your bank is offering you the lowest rate, but your mortgage broker will. In the end, saving money is the main reason to seek out mortgage brokers to find you a mortgage. Settling on a mortgage rate that's even a tiny bit higher than you could get will end up costing you thousands of extra dollars in the end.
The Advantages Of Going With A Mortgage Broker.
A mortgage broker is your intermediary with lending agencies such as banks and credit unions. A mortgage broker can make a difference for you in getting the best interest rate possible. A good mortgage broker is aggressive and knowledgeable and an asset to have on your side as you pursue one of the biggest purchases of your life.
In case you're not sure specifically how a mortgage broker can help, here are a few points for you to consider about why a mortgage broker could be right for you.
1) A mortgage broker can save you time and stress. Banks and lending agencies provide potential clients with a surplus of literature and reading material on any given loan. Much of this literature is written in abstruse lingo, and is difficult or time-consuming to decipher. A mortgage broker can decode this information as well as offer advice once the info is deciphered.
2) A mortgage broker will provide you with options. It's a mortgage broker's job to overcome obstacles and find the correct loan for you, the client. Brokers in Canada have access to a large electronic network of lending agencies, where they can find the right loan for your personal and financial circumstances. Once you are presented with options that are tailored specifically for you, it can be easier to feel comfortable making a decision.
3) Mortgage brokers will not charge you a fee. Mortgage broker's typically do not charge fees, as they are paid by the lending institutions that offer the mortgages. Though this is the case, a mortgage broker works for you exclusively. It's in their best interest to serve their clients well.
Mortgage brokers are an asset when negotiating or acquiring a large loan. A good mortgage broker could make the difference in finding the loan that fits your personal and financial needs.
How a Mortgage Broker Can Save You Money:
Being able to buy the home of your dreams should make you extremely happy. Would you still be as happy after you moved in and found out that you could have gotten a better financial deal than you did? It is very possible that you can get the best deal right off the bat by using the services of a mortgage broker. Most people do not realize this and usually accept the first offer they get from the mortgage company selling the loan. For home buyers, there are many benefits of using a mortgage broker.
The Bank Lender vs Mortgage Broker
A bank lender can only offer you products that their bank creates, and these products are very limited. Oftentimes, a bank lending agent will not compare what their bank offers with other banks to find something that fits your needs. In other cases, a bank agent will work harder for you.
Why a Broker Works Harder for You -
A mortgage broker c is only going to get paid once they make a sale, which is when the papers get signed. This means that it is in the best interest of the mortgage broker to get you the best deal possible and close the loan. Mortgage brokers deal with several lenders on a daily basis, and they know what each is willing to do. In most cases, the mortgage broker will not charge fees. They gather your information and send it off to all the companies they feel can give you a good offer.
How a Broker Performs Their Service :
Another benefit you receive from a broker is how they perform their services. A banker gives you an institutionalized service, and you have a formal banking relationship with them. A mortgage broker will spend a lot more personal time with you, make you feel welcome and spend more time working on your loan. In many cases, the mortgage broker will even visit your home.
Mortgage Broker Savings:
A mortgage broker has access to mortgage deals at a lower price than bankers will have. Why? Because mortgage brokers can deal with wholesale prices and not retail prices like bankers do.
Bad Credit Circumstances :
If you have some type of problem with your credit, you will really notice how much a mortgage broker can help. A mortgage broker is familiar with so many lenders and what type of specialties they offer. They can work to find a lender that will loan money regardless of your credit circumstances. They know ahead of time which lenders normally loan money to people with bad credit or whatever other special circumstance you might have. A bank lender, however, is going to be limited with offering any type of special deal.
Taking Care of Paperwork :
If you are not a big fan of dealing with paperwork, the mortgage broker will do the work for you. This will save you a lot of time and reduce the stress you might have had thinking about it. They are able to improve your mortgage deal efficiency because they are always pushing your deal through while you are doing other things.
Avoiding Complications :
A mortgage broker can help you avoid a future complication. They have such a wide knowledge of the mortgage market that they know what is good or bad for you. Using a mortgage broker will ensure you have smooth contact with everyone involved in your loan.
The next time you are in the market for a home loan, talk to a mortgage broker and see how much money you can save.