For many homebuyers, purchasing a new home is a very complex undertaking. From finding the perfect property in the ideal location and determining a realistic price range to negotiating the sale, securing a reasonable mortgage, and moving into the home, there is a lot of work involved in the process. There are several types of professionals who can assist with the various stages of buying a new home. Real estate agents can prove invaluable in the house-hunting phase, while professional movers can make moving day a lot less stressful. However, one of the most useful services for many homebuyers is that of a mortgage broker.
What Does A Mortgage Broker Do?
A mortgage broker serves as a third-party intermediary between the individual or individuals purchasing a house (the borrower) and the financial institution offering them a loan (the lender).
Mortgage brokers do not lend mortgage funds to homebuyers. Instead, they originate mortgage loans and connect borrowers with the right loans for their needs. They can make the process of finding, applying for and securing a home loan significantly easier. Below is a closer look at some of the ways they can assist in the process.
Even though a mortgage is a long-term commitment to pay a significant amount of money each month, many homebuyers do not spend a lot of time comparison shopping for the best mortgage possible. This may be because the process is extremely time-consuming, and some people do not realize there are other options besides their bank.
Mortgage brokers do all the legwork when it comes to finding the best deal for people who are looking to buy a home, which frees up time in their schedule for them to focus on finding the right house.
Brokers compile a list of the mortgages that multiple lenders are offering a particular borrower and provide guidance on which offers will best suit the borrower’s financial circumstances.
Mortgage brokers have relationships with a broad range of lenders, some of whom borrowers cannot access without going through a broker. This is because certain lenders work exclusively with brokers and use them as gatekeepers who bring them suitable borrowers.
Some brokers may have access to hundreds of loan products; checking with each of these lenders individually would be an overwhelming task for a borrower to carry out on their own.
In addition, because of the volume of mortgages they secure, some brokers may be able to obtain special rates that are lower than those that borrowers would have been able to obtain on their own.
Mortgage brokers help borrowers find solutions to common loan challenges. For example, their in-depth knowledge of the way different lenders operate enables them to focus on the particular lenders who are most likely to approve a candidate who has less-than-stellar credit or is unable to make a large down payment.
Many brokers have experience with specific types of loans, such as FHA loans or VA loans, so borrowers who are looking to buy a home with this type of loan can seek brokers with expertise in these areas to ensure a smoother process.
Finding The Best Deal
Despite their relationships with lenders, mortgage brokers represent the borrowers first and foremost. This means they act as an agent for the person buying the home and help to find the greatest value in terms of repayment amounts, interest rates, and overall loan products.
Mortgage brokers will interview borrowers early in the process to get a better idea of their financial situation. They will also ask about a borrower’s short-term and long-term goals so they can help steer them toward the right loan for their needs.
Many situations call for something beyond the traditional 15-year or 30-year mortgages, and brokers will be aware of other mortgage solutions that can suit a particular borrower. Because they are so familiar with the mortgage industry, brokers can help borrowers avoid some of the common pitfalls encountered in the loan process.
Although many homebuyers believe that going through their bank is the best route because they already have an established relationship, it is important to keep in mind that mortgage brokers also offer personalized service throughout the entire process.
They can answer questions and ensure everything runs smoothly, from application to closing. Moreover, a bank can only offer a borrower the mortgages that come from that particular bank, whereas mortgage brokers offer a range of loan products across a variety of lenders, raising the chances of finding more favorable terms.
Reach Out To The Experienced Mortgage Brokers
If you would like to learn more about the benefits of working with a mortgage broker, reach out to the knowledgeable team at MyLendingPal. They work hard to get to know your needs and help you find the right loan for you.