Mortgage brokers manage the process of loan applications with different lenders, negotiating the terms and finding competitive interest rates.
You have now narrowed down the search to finding your dream home, and you are currently on the hunt for the best mortgage deal to put those keys in your hand. One way for you to do it is through a mortgage broker who can carry you through your borrowing process from start to finish.
Probably you have heard of the term mortgage broker from friends or your real estate agent. Who is a mortgage broker, and what do they do differently, say from a bank or a loan officer?
Here are some crucial questions and answers about mortgage brokers.
1. Who is a mortgage broker?
A mortgage broker is a person who acts as a middle man between potential lenders and you. His work is to work on your behalf to find mortgage lenders with favourable interest rates which suit your needs. Mortgage brokers have suitable lenders, making your life much more comfortable.
Mortgage brokers are usually licensed and regulated financial experts.
They do a lot of work, that is from pulling your credit history, gathering documents and verifying your employment status and income- and use this information to apply mortgage loans for you in a short period.
Once you settle on a loan with a lender that suits you, your mortgage broker will work with the bank’s underwriting department, the title company and the real estate agent to keep the transactions running nicely through to the closing day.
2. How do mortgage brokers get paid?
These type of brokers are usually paid by the lenders but sometimes by the borrowers as well, but never both. You may decide to pay the broker yourself; in this case, it is called borrower-paid compensation. When shopping for mortgage brokers, you may ask them, ‘what is your lender paid compensation or what is your borrower-paid compensation rate. The rates could be the same, but you still have to do a diligent shop around.
The home prices and the competitiveness in your local market will play a large part in dictating what the mortgage brokers charge. The big cities, the public coastal areas and other places with substantial value properties may have broker’s fees as low as 0.60%. The federal laws can regulate how high the compensation can go.
3. Are mortgage brokers right for you?
Mortgage brokers (http://grapevinemortgages.com.au/) apply for different types of loans from different lenders on your behalf, and they negotiate terms and shop for competitive mortgage rates. Using mortgage brokers, you save a lot of time since it can take you even hours when you are applying for a loan.
There is also back, and fourth communication during the underwriting of a loan and ensuring the transactions remain on track. Mortgage broker saves you the hassle involved in managing those processes.
Also remember to pay close attention to the bank, broker and the lender fees when choosing any lender.