Can a Mortgage Broker Find a Lower Interest Rate for Your Mortgage? Find Out Today.
You have gone through the house-hunting process and now have a house at the top of your list that has won your heart. The next stage would be to pay, get the key, and move in. But where is the cash? Here is where a mortgage broker comes in.
A mortgage broker usually works as a link between you and the lender to help you through the process. Mortgage brokers are licensed financial professionals who will do gather the necessary paperwork, such as your credit history, income verification, and so on. They will then use this information to apply for loans from several lenders as soon as possible.
Can a mortgage broker find a lower interest rate for your mortgage?
Getting a good mortgage broker will save you a lot of time and money. They have years of experience in helping home buyers and will, therefore, point you in the right direction in terms of who will give you the best loans and avoid lenders with a lot of hidden charges. There are several advantages of working with a mortgage broker.
Most homeowners are, however, skeptical about the role of a mortgage broker in the lending process. Can a mortgage broker help you get lower interest rates? How are they paid? Read further to find out some facts about mortgage brokers.
Can a mortgage broker get you lower interest rates?
Most home buyers will leave the job of getting a good mortgage deal to the lending broker, which is a bad idea. You must enlighten yourself on the lending rates in the market before meeting a mortgage broker. In some instances, lenders will offer mortgage brokers the same rates they would have offered a home buyer directly, and in some cases, you might get a better deal directly.
Besides, looking around on your own first, you should also use a mortgage calculator to double-check whether what the broker is getting you is a good deal. It is also essential to request a variety of options from your broker. In many instances, brokers would know of lenders; you may not be aware of their existence.
On the other hand, mortgage lenders may save you hundreds of dollars as they can convince lenders to waive some of the application, appraisal, and processing fees involved in the lending process.
How will you pay the mortgage broker?
Depending on the broker you approach, some are paid by the lender and some by you, the borrower. The payment is usually a percentage of the loan amount, ranging from 0.5% to 2.75%. The percentage of commission will vary depending on how competitive the real estate market is in the area you are buying a home. Generally, brokers are not allowed by law to charge more than 3%.
What should one expect from a mortgage broker?
· Your mortgage broker should offer loans from several lenders. Do not settle for a mortgage broker who only leads you to one lender. You should have options.
· Always agree on the mode of payment as well as percentages from the very beginning.
· Always ask why they recommend certain loans and not other loans.
· Always inquire about what other features come with the loan. You should also find out whether there are additional fees.
· Ask about information and documents you will be required to provide to get the loans.
· Lastly, inquire about the threshold for the Lenders Mortgage Insurance.
While working with a mortgage broker will save you time, it may not necessarily save you money. As home buying is a big decision that will affect your finances in the long term, it is necessary that you take your time to weigh the options. Have more questions? Give us a call or visit our contact page here!