When you’re shopping around for a mortgage, you’ll hear all sorts of terms thrown around by different companies, each one offering to provide you with the best possible deal on your loan. But what does this mean? What’s the difference between an originator and an agent? What are the benefits of using a mortgage broker instead of just going through an agent? Here are 10 benefits of using a mortgage broker that should help clear things up.
1) They can save you time
Buying or selling a home is not only an emotional process, but it’s also very time-consuming. It can take weeks or even months for you to secure financing on your own. And if you get frustrated or don’t know where to start, it’s easy to get distracted from your main goal: finding your perfect house. A mortgage broker works with multiple lenders and knows all their products, so they are able to pull together multiple quotes in one place in just minutes. This saves you days or even weeks when buying or selling a home. Use that extra time to find more homes! They can give you advice without bias: A lender wants to make money by lending money; mortgage brokers want to make money by helping people buy homes. The difference? That little bit of neutrality makes it easier for a broker to give advice based on your best interests about which loan product will be best for your needs, especially compared with someone who makes money based on how much he or she lends out.
2) They provide you with protection
A mortgage broker is not tied to one bank or lender. As such, when you use their services, you have an advocate who looks out for your best interests and ensures that you’re aware of all your options. This is particularly important when dealing with big banks and loans: They can be disarming in their size and intimidation tactics. A good mortgage broker will work hard to protect you from getting taken advantage of by these huge financial institutions. What if I don’t know anything about mortgages? That’s ok! Find a place where people ask questions before buying a house.
3) They’re readily available
Having your mortgage broker’s phone number on speed dial is not only convenient for when you need to get in touch, but it makes calling them even easier. By having one point of contact, you can more easily and quickly access any info you need and streamline your business dealings. A lot goes into financing a home purchase, from documents to sign and numbers to crunch; having someone who knows what they’re doing guiding you through it all will save you time–and likely some frustration. A mortgage broker will be able to explain each step of your process so that it doesn’t become overwhelming. And if anything does arise–whether it’s during your paperwork review or appraisal phase–you’ll have someone there to help you resolve issues and move forward.
4) They offer better customer service
A mortgage broker works on commission, so he or she is motivated to find you the best possible deal. If you get service with a smile at your bank but get more personalized attention from your broker, it’s no surprise that many consumers prefer brokers for their mortgages. This typically includes better availability of staff, cheaper rates and better product selection than banks offer. In addition, when using a broker you have an entire team working for you instead of one person who may be unavailable when they are needed most. In fact, in some instances where a problem arises with a loan application, a team can handle all areas that need to be addressed until they resolve any problems or questions in order to secure funding for your home purchase.
5) They’ll do more than just sell mortgages
When you’re ready to start looking for a home, chances are good that you’ll want someone by your side who is in tune with your financial situation. That’s where mortgage brokers come in. In addition to offering flexible terms and competitive rates, mortgage brokers can work with you throughout every stage of buying a home—from prequalification and preapproval to underwriting and closing. They’ll help you navigate through each step while keeping your best interests at heart along the way.
6) They’ll help you get pre-approved
Before you start applying for home loans, contact a mortgage broker and get pre-approved for a loan. This will let your real estate agent know that you’re serious about buying and show home sellers that you can afford to buy their property. They’ll guide you through all aspects of buying a home: From figuring out how much house you can afford down payment options, closing costs and even strategies on how to negotiate with sellers over price—your mortgage broker is going to be by your side from beginning to end when it comes time for closing on your new home.
7) They’ll guide you through the entire process
When it comes to real estate, there are hundreds—if not thousands—of details that need to be sorted out. A mortgage broker can guide you through all of them, making sure your interests are protected. In addition, brokers have access to dozens of lenders and loan types—so you’ll have an easier time getting a mortgage for which you qualify. You’ll also benefit from in-depth knowledge: According to stats, most Australians used a mortgage broker to secure financing for a home purchase. And mortgages aren’t always cut and dry; every transaction is unique based on individual needs. This makes it difficult for potential borrowers to do their own research when selecting a lender. Specialists have expertise in many different areas, including loans backed by federal housing authorities. They’ll help you with these options if they apply to your situation. If something goes wrong, a broker will help find solutions: When things go awry during a mortgage transaction, these professionals know how to deal with problems quickly and effectively.
8) Their advice is unbiased and free from conflicts of interest
A mortgage broker works for you and gets paid when you do, not from third parties that may benefit if they steer you to one financial institution over another. As such, they can offer objective advice that’s tailored to your needs. Plus, they’re more likely to explain complicated concepts in layman’s terms, so you really understand what’s going on. They can help you avoid hidden fees: Banks might charge thousands of dollars in unexpected closing costs because their mortgages often come with extensive fine print. You could save yourself money by using a mortgage broker instead. They’ll review all closing costs with you upfront to ensure there are no surprises down the road—and no unnecessary fees eating away at your savings balance.
9) You may qualify for lower rates or fees through their network of lenders.
A mortgage broker can help you secure better rates and fees than those offered by banks and other lending institutions. They do so by connecting you with lenders outside their networks, often leading to lower interest rates, closing costs and other expenses. They also may be able to expedite your application process. Since brokers work with many financial institutions, they know exactly what each one offers as far as rates go. The more options at their disposal, the more likely it is that they’ll find you an excellent deal. Choosing to apply through a broker means giving up some convenience; after all, you won’t be walking into your local bank to handle your mortgage business in person.