Understanding What a Mortgage Broker Does

Written by Family Photos on. Posted in Mortgage broker, Mortgage planning, Stacy schlesinger

Are you considering your mortgage plan when it comes to your home or an investment property? Mortgage planning can be tricky, and nearly 60% of property owners say they wish they better understood the details of their mortgage. If you’re looking at an existing conventional mortgage, are a first time home buyer, are considering buying a vacation home, or are thinking about the future with an investment property, here’s everything you need to know about working with a mortgage broker.

What Is A Mortgage Broker?

This essentially a person who acts as a middleman between you and whomever you hope to secure a loan from for that investment property or new family home. They are licensed professionals who can do everything from gathering documents to helping you get all your ducks in a row so you’re ready to apply for a loan. They also work with banks and other lenders to help you get the best deal and make sure that you understand what’s happening before and after you sign. In March of 2016, the average price for homes selling in the United States was $186,000. A mortgage lender is there to make sure buyers are able to make the right decisions about such a large purchase.

How Does Having A Mortgage Broker Help?

One of the first benefits is having someone to help you apply for a loan with different lenders, some of whom you might not even be aware of. The mortgage broker will also help you to find the lowest possible rates and negotiate terms so that you can get approval. One of the biggest benefits of hiring a mortgage lender when you’re considering a new home or investment property is that you now have someone on your side who has relationships with lenders both locally and nationally, and those relationships can translate into accessibility, lower fees, and better terms. Finally, a mortgage broker saves hassle in terms of dealing with numerous details, lots of back and forth, and the hours it takes to apply in multiple places. If you’re one of the 32% of people who are first-time buyers, you could save a lot of time and angst with a mortgage broker on your side.

Is There Any Downside to Hiring a Mortgage Broker?

It will of course cost money to get this kind of help. About 1% of the loan for your new home or investment property will be required to pay the mortgage broker. While this is not an insignificant amount, it has to be understood in light of the great savings in effort, communication, and time that a mortgage broker can provide you. It’s also likely to be a good deal with a mortgage broker is able to get your loan for that investment property that is significantly lower than you could hope to get on your own. It is also possible that working with a broker might mean you have less access to some of the larger lenders; however, that possible downside is again often offset by the broker’s ability to help you apply with multiple lenders, including some you might not be aware of.

What Should I Do Before I Choose A Broker?

In the year 2016, 14% of all property buyers paid for 100% of their purchase using a mortgage. A mortgage is a big deal, and it’s important to make smart decisions when you are working with these amounts of money. Look for referrals from people you trust who have actually used a particular broker. Also see what your real estate agent recommends, as many agents are aware of reliable brokers they trust and have worked with in the past. Some real estate agencies even have in-house brokers you can work with. As with hiring anyone for anything, it doesn’t hurt to talk to several people to find out prices, communication styles, knowledge levels, and just whether or not you feel comfortable working with them.

Buying an investment property, a new first home, or a vacation property can be a nerve-wracking and time-consuming experience. Make it a bit easier by hiring the right mortgage broker to help.

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