Understanding Loan Terms

Considering a Mortgage Broker? 2 Things to Know

20 July 2018

Stanley Simmons

Are you gearing up to purchase a home, but not sure if you should use a mortgage broker? They can help simplify the process for you when it comes to getting approved and finding a great interest rate. Here are some things you need to know about using a mortgage broker before moving forward.

Mortgage Brokers Do All the Work

The main reason many people use a mortgage broker is because they do the bulk of the work for you of shopping for a mortgage. It can be time consuming to visit several lenders, go through the application process, and find out if you are pre-approved or not. If you are limited to time on weekends to go to a local bank, you may find that you are spending more time shopping for a mortgage than shopping for a house.

A mortgage broker also knows how to interpret the different rates you receive and explain what they mean in a way that is easy to understand. You will know with certainty that you are getting the best possible deal on your mortgage because you have a neutral party that is willing to help compare and contrast them for you.

Mortgage brokers have existing relationships with several lenders, so they'll handle the hard part of finding the best lender with the best rate. If getting approved is your main problem, they'll work with lenders that they know are more willing to take on a mortgage with a credit score similar to yours.

Mortgage Brokers Charge a Fee

Another thing to know is that mortgage brokers do charge for using their services. It is typically a percentage point of the value of the home you are purchasing. If you plan on staying in a home for a few years before selling, this may not make the cost involved worth it. However, if you are staying in the home for a long time, using a broker to find the best possible rate can easily offset the cost of using them. You won't be charged a fee unless you get your loan through the mortgage broker, so it is worth getting in contact with one to see how they can help you.

These are just a few things to know about using a mortgage broker. For more information, schedule a consultation with one. Working with a mortgage broker doesn't even need to be done in person, since it can all be done online or over the phone.

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About Me

When was the last time you realized you were in the red financially? Although most people don't think about their finances on a day to day basis, it can be easy to find yourself living paycheck to paycheck if you aren't careful. I began thinking carefully about the financial implications of some life decisions I was making, and I knew I had to make a difference. I talked with a loan officer about getting things together, and he was instrumental in helping me to work things out. Read more about my financial successes and failures on this little website. You might be able to avoid some of my previous mistakes.