7 Reasons Why You Should Use a Mortgage Broker and Not a Bank
What Is A Mortgage Broker?
A mortgage broker works for a mortgage company, which provides an array of financial services. Basically, a broker is an intermediary between the banks who provide the loan (the lenders) and the homebuyer looking to borrow. Working with both the customer and the institution, a broker’s goal is to find a mortgage or a refinancing option that works for the borrower. Let’s find the reasons to use a mortgage broker.
A mortgage broker is a specialist of sorts. They have more flexibility than an institution and generally have a wide variety of home loan programs through various lending institutions. Think of your bank as a general physician, and your mortgage broker as a specialist in the field.
What Does A Mortgage Broker Do?
A good mortgage broker starts by understanding and listening to his or her client. Mortgage brokers gather financial information, request credit inquiries, and ultimately, find the best options for the borrower. Their aim should depend on the client’s goals; for example, they may work to find the lowest rates, the lowest down payments, or a mortgage that doesn’t require insurance.
While a loan is being processed and awaiting approval, the mortgage broker is communicating with both the bank and the home buyer. By playing the role of liaison between lender and borrower, they can ensure the loan process goes as smoothly as possible.
7 Reasons why you should use a mortgage broker and NOT a Bank:
- Unbiased Insights: Every bank is going to be vying for your business even if their product doesn’t necessarily fit your financial position. On the other hand, a mortgage broker makes the same commission regardless of the institution you borrow from. As a result, they’re impartial. A good mortgage broker is going to give you honest feedback and better options.
- More Options: If you walk into a lending institution, they’re only going to show you what they have available. Unless you shop around to all the other banks in your area, you won’t know about all your options. A mortgage broker can pull from every institution their company uses and will inform you of every loan available.
- Less Work: You could shop around at every bank and lender, or you could stop into a mortgage broker’s office. In this way, you’re saving a lot of time by circumventing all the sales pitches from the banks and getting right to your options.
- Tailored to Your Individual Needs: Because of a mortgage broker’s range of options, they can fine-tune their search to fit your individual financial situation. Maybe you’re looking to have a smaller down payment, low rates, or no mortgage insurance; whatever the case may be, a good mortgage broker will find an option that works for you even if your credit is less than perfect.
- Mortgage Education: Even if a mortgage broker finds the loan they think is right, they’ll still show you the other options available. As a result, you get the opportunity to gain some important insights into your selection and current financial position.
- Lender Credit: A mortgage broker can offer you lender credit. This option eliminates or significantly lowers upfront fees. It should be noted that your interest rate will be higher when you choose a no-cost loan. On the other hand, you could save a significant amount of money, depending on what your plans are. If your goal is to sell your new home sooner rather than later, you should consider a no-cost loan option.
- Guide you Through the Process: The long road to loan approval can be a rocky, winding path. Sometimes it’s best to have a professional to guide you through the process. From beginning to end, a good mortgage broker will work with you until the loan closes.
What A Mortgage Broker Needs from you:
- List of assets
- Employment documentation
- Credit Report (permission to pull credit)
Questions to Ask Your Broker:
- How many banks/lending institutions do you work with?
- What are your fees?
- What is your communication process with your clients?
If you’re interested in using a broker, find a company that offers a free mortgage consultation. This way you get to know a little more about the company and the brokers you could potentially be working with to find your loan. And if you have more reasons to use a mortgage broker, share them with us!
Now that you know the scoop on what a mortgage broker is, share your knowledge, like our facebook page, or comment below.
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