A mortgage broker acts as a middleman between you, the lender and you. Mortgage brokers are professionals who have been trained and may need licenses depending on where they live.
You might consider contacting several lenders before you purchase a home. You will need to gather many documents and may apply to multiple lenders .
The job of a mortgage broker is to do all the research and hard work on your behalf.
The mortgage brokers are partners with many lenders and they will match you with the right lender based on your financial situation.
Is it a good idea to use mortgage brokers?
A mortgage broker’s pros and cons
- Mortgage brokers have access to many more lenders than the average person. Some of these lenders only do business with mortgage brokers.
- A mortgage broker could help you locate a lender that will offer you the best rate. A mortgage broker could get you lower rates or lower fees.
- It doesn’t take a genius to understand the differences between lenders and underwriting. While it is important to understand what you are getting into, a mortgage broker can help.
- A mortgage broker will save you time. They do all the research for you, including finding low rates, minimum credit scores and fees.
A mortgage broker’s pros and cons
- They might need to be paid. Ask them how they make their money. Sometimes they are responsible for paying them. Other times it is your responsibility. Ask upfront if the broker charges a flat fee or if they work on commission.
- It is possible that you are worried about a conflict. The lender may compensate the broker. A broker may be biased towards recommending that you work with the lender if they pay their broker a commission. Ask a broker how they make their money. You can also search online for recommendations from friends or family about whether the broker is trustworthy.
- Not all brokers work with lenders Some lenders only work with mortgage brokers while others don’t. You could miss out on some opportunities by going through a broker.
Here are some tips to help you find a mortgage broker
How can you find a reliable broker that will get you the best deal? Ask for referrals from trusted people.
Ask friends and family who have purchased homes if they used a mortgage broker. Would they recommend the broker they used if they had?