For many of us, searching for the right mortgage can be a complex and intimidating process. That is why many people search out the help and guidance of a mortgage broker in order to ease the stress and make the process a little bit easier to understand. While mortgage brokers do not actually create or give out loans they can help you find lenders that offer attractive rates and beneficial terms. They act independently and can help you connect with a number of different agencies in order to match your needs with the right loan.
It is important to realize that you do have to pay for the services of a mortgage broker, but it can still be a beneficial process if you have poor credit or do not have enough money to cover closing costs or a sizeable down payment. On the flip side of the coin, you may simply not have the time or patience to comparison shop and weigh the pros and cons of a number of different lending options.
Again, keep in mind that mortgage brokers do not offer a free service and will usually tie their fees into the cost of the loan by upping the closing costs or by simply renegotiating for a higher interest rate.
How to Find a Mortgage Broker
One of the best ways to find a mortgage broker is to ask for recommendations from friends and family that have been through the process before. You can also use the internet or even the phone book to get in touch with brokers that specialize in loans. You can also browse around on Rate Rush itself in order to get in touch with the right people that can offer the right guidance. But as with dealing with any service providers, ensure to instantly eliminate anyone that does not seem professional or that avoids giving you straight answers to all of your questions.
Previously, it was only beneficial to meet a mortgage broker in person but the internet has really opened up doors in terms of your options. Your best bet is to find a broker that is a certified member of the National Association of Mortgage Brokers. NAMB gives certification to mortgage brokers and ensures that they follow all industry standards.
Going through the Process
Once you have connected with a broker, they should always begin by interviewing you to determine all of your needs and by presenting you with a list of your options. Make sure that they can explain all of your options in detail and that they do not provide short answers or push you towards something that you are not comfortable with.
Your best bet is to never commit to just one broker, as you can work with as many different brokers as you choose. Some brokers will try to persuade you to sign an agreement stating that you will not work with anyone else, but the truth is that you do not have to commit to anyone until the mortgage application begins.
Always be up front and straightforward when it comes to discussing how your mortgage broker will get paid and what their exact compensation will be. The more questions you ask the better off you will be. Does that compensation mean that other loan offers end up being better? What is the annual percentage rate? What are the closing costs? Are there any additional fees you need to know about?
A Few Precautions
One of the reasons that you want to find an experienced and professional broker is the fact that many lenders these days are reluctant to negotiate with just anyone within the field. Over the years some brokers have been pushing risky clients on lenders and hiding their poor credit rating, so you need to find a broker that has experience and a good reputation within the industry.
No matter which broker you end up choosing, be sure to remember that it is not always in their best interest to find you the best deal. The best mortgage brokers will match you will the best loan possible, but there are some that are looking to push loans that will make them the most profit overall. You should be safe as long as you stay informed, do your research, and look closely at all the mortgage offers from a few different brokers.
The truth is that if you have enough money saved to put down a 30% down payment on your home and have a credit rating near or around 800, you will probably not need to seek out the help of a mortgage broker. There is a very good chance that you can find a lender that will offer exceptional terms on your own.
However, if you do not fit into the ideal borrowing category or are looking to get a hold of a jumbo loan then finding a mortgage broker to help you may be your best choice, both in the short and long term.