What Does a Mortgage Broker Do for You?
What do Mortgage Brokers do for you?
The home purchase process can be a long, arduous journey. Finding a home loan isn’t always the easiest thing to do. Sifting through offers and visiting numerous banks and lending institutions is enough to frustrate even the hardiest of home buyers. Luckily, that's where mortgage brokers come into play.
Mortgage brokers act as intermediaries whose job is to help connect buyers with investors and banks. Essentially, they collect your information and shop around for relevant mortgage options based on the information they collect from you. Mortgage brokers take care of all of the dirty work, so you don’t have to deal with the stress of finding lenders, getting quotes, and sitting in those highly uncomfortable waiting areas that most banks have.
Mortgage loan brokers have access to a large portfolio of home loan investors. This means that they can be highly useful in connecting most borrowers to a wide range of lenders, regardless of the financial situation. Some brokers can even access FHA, VA and USDA loan programs, but it all depends on which companies they’ve developed relationships with over their careers.
Why Use a Mortgage Broker?
Simply put, they are professional home loan hunters! They know all of the jargon, have a vast knowledge of the different home loan programs, and for the most part know where to look for a good deal. With the help of the right mortgage broker, your best options come to you, instead of you trying to make heads or tails of 10 different quotes that took weeks or months to amass.
Additionally, they are sometimes the best bet for home buyers with poor credit or low income. Due to their extensive knowledge of lenders and programs, they can find loans that cater to almost any financial situation. They know what to look for when the average home buyer would call it quits and consider renting. Mortgage brokers generally have access to a ton of investors and lenders that offer subprime mortgage loans and low down payment options that many lending institutions wouldn’t offer an inquiring potential borrower.
How Much Does It Cost to Use a Mortgage Broker?
Like most service providers, mortgage brokers don’t provide their service for free. Some people would even argue that using a mortgage broker can be on the expensive side. We could weigh out the cost effectiveness on a per-basis scale, and still not really have a definitive take on the matter. What we will do, however, is point out that most mortgage brokers typically charge between 1% and 2% of the loan amount.
More mortgage brokers tend to lean more towards 1% than the 2% though, so it is fair to say that some brokers are more expensive than others. Our best advice to home buyers looking to use a mortgage broker is that when choosing your broker, make sure that what you pay is worth the service you receive, and that the broker has a positive reputation.
They may be costly, but if you find the right mortgage broker, one that truly has your best interests at heart, you may be able to get that dare-I-say-perfect mortgage for the house you have your heart set on.