Before you invest or buying or refinancing, the first decision you have to make is whether or not to use a mortgage broker. While brokers had their heyday in the 90s being responsible for almost 80% of the mortgages originated; the real estate downturn reduced their influence – but didn’t make them obsolete. Mortgage brokers are the ideal choice for many people, and here are a few reasons why.
They work with more than one wholesaler of mortgages
A bank or lending institution is a wholesaler of mortgages, that may also have a retail side. That would be the mortgage department. A mortgage broker can work with several lending institutions, which means that they have access to a greater variety of mortgage packages then the department in the same bank. This can be very important if you are trying to get approved with less than perfect credit, or for non-traditional mortgage loans.
Their fees are more transparent
The cost of a mortgage you get through a mortgage broker will include their fees for service. This is why many people think they are saving money on fees when they apply through the mortgage department of a bank or lending institution. Surprise! Those agents get commission fees too, but the amount is often hidden from view. Mortgage brokers know they have to offer competitive mortgages so they can’t overcharge you and expect to stay in business. They also have to be upfront about their commission rates so you know exactly what you are paying for with the loan.
If you are going for your first mortgage, you want a broker
Applying for your first mortgage used to be easy. The lending climate has gotten better, but if this is your first mortgage, you definitely want to work with a mortgage broker. They have more lending resources they can look at to find you a match. They also don’t have the highly personal picture of your finances that your bank has – sometimes that can work to your advantage.
Brokers can help you with your financial image
With a mortgage broker you have more control over your financial image on your application, and won’t be bit by something that happened years ago. It may not have affected your credit rating, but if your bank has a record of several bounced checks from 10 years ago – the bank mortgage officer can be influenced by that knowledge. A mortgage broker lets you create a profile on your application that reflects your present.