Some people feel overwhelmed trying to find the best mortgage deal. This is often the first telltale sign that you might want to consider working with a mortgage broker instead of handling everything on your own. It is important, however, to do your own research before making this decision, since it isn’t the best choice for everyone.
What a Mortgage Broker Does
A mortgage broker will work with you to find home loans that will suit your individual needs. They work as an intermediary between you, the borrower, and the lenders. They will help you prepare your paperwork for applications and walk you through the closing process. They are the ones to answer questions such as how much you can actually afford or how to find the best deal. For many borrowers, it can be confusing what the best deal will even look like for them. They might not know if lowest interest rates are more important than other factors. These are all questions you can ask a mortgage broker.
How They Differ From a Loan Officer
If you’ve been a long-time customer at your local bank, it may seem easiest to go there, talk to their loan officer, and receive many of the same services listed above. The main advantage to working with a mortgage broker over your bank’s loan officer is that a mortgage broker isn’t tied to the one bank. Your bank’s loan officer is only going to tell you about the mortgage products offered at their bank. While you may be a long-time customer there, you probably want the best deal possible. A mortgage broker will be able to tell you about products from other financial institutions and what options you have for finding a home loan that will work best for you.
Pros and Cons of a Mortgage Broker
When you work with a mortgage broker, you will benefit from their knowledge of the home loan products available for you. It will save you time having to research these things for yourself. Their experience will also give you more insight on your options. A mortgage broker will also make sure your paperwork is done correctly and the process is handled. This will save you time and stress. They can answer your questions expertly in order to give you insights to the road ahead.
On the downside, a mortgage broker will also charge a fee. This can range from a 1% borrower fee paid directly to them or a 2% commission fee added into the cost of your loan. In addition, you should always take into consideration that while you are benefitting from their knowledge, they may have their own bias. While they aren’t tied to one lender, they work with these companies regularly and this may sway their opinions.
With that in mind, a mortgage broker can be sincerely helpful to finding the best option for your home loan. The key is in vetting the professionals so you find one with a great reputation that you can trust to work for you.