Brokers are part of a very common business model throughout the world, such as insurance brokers, stockbrokers or real estate brokers. These are intermediaries that advise their clients and obtain the best option in the market to acquire a new mortgage loan or obtain a purchase of mortgage debt.
The essential characteristic of the mortgage broker is to serve as a bridge between the financial entities that offer mortgage loans and the clients they have a duty to represent. The broker has all pertinent information and supports the client in choosing the best options.
The Advantages Of Hiring A Mortgage Broker
Banks and financial entities have their advisers, of course. Very good, in most cases. Everyone, of course, has a mission to offer their products. The broker, however, is independent. They have access to all the products in the market and some, that are not available at any bank. His criteria, it could be said, is more objective.
A similar situation occurs in construction companies and real estate sellers. They know the subject, they can give you some information, but they will not have a range of possibilities as broad as a broker.
It is clear, then, that the broker is a multifaceted-product specialist. Now, what exactly does a mortgage advisor do? Study the client’s situation: their income, expenses, debt capacity, credit history, and business objectives.
Utilize a mortgage broker to save time; applying for preapproval with many lenders can take hours, and then there’s the back-and-forth communication needed in underwriting the loan and ensuring the transaction stays on track. A mortgage broker can alleviate some of the stress associated with managing that process.
However, when selecting a lender — whether through a broker or directly — it’s critical to consider lender fees. In particular, inquire about the fees that will generally appear on Page 2 of your Loan Estimate form under “A: Origination Charges” in the Loan Costs section.
Then, compare the Loan Estimates you receive from each lender, comparing your interest rate as well as any fees and closing costs.
That head-to-head comparison of several possibilities is the only way to ensure that you make the finest choice possible on one of the most significant purchases of your life.
How do I go about selecting a mortgage broker?
The ideal method is to solicit referrals from friends and relatives, but verify that they have truly used the broker and are not simply mentioning a former college roommate or distant acquaintance. Google is also a great resource!
Gather as much information as possible regarding the broker’s services, communication style, level of competence, and client approach.
Another source of referrals is your real estate agent. Inquire of your agent for the names of a few brokers with whom they have worked and are familiar. While some real estate firms include an in-house mortgage broker as part of their suite of services, you are not required to use that firm or individual.
Choosing the best mortgage broker is similar to selecting the best mortgage lender: It’s prudent to interview at least three persons to ascertain their services, their level of experience, and how they might assist in simplifying the procedure.
Verify with your province’s professional licensing authorities if mortgage brokers hold valid licenses.
Additionally, investigate internet reviews and contact the Better Business Bureau to determine the broker’s reputation.