Should I Use a Mortgage Broker?
Mortgage brokers are third-party intermediaries who help facilitate finding a mortgage by connecting buyers and sellers. They act as a liaison between the buyer and the mortgage lender and can help with the underwriting process, processing applications, and ensuring the mortgage application is complete before it is presented to a lender. A mortgage broker can be helpful to a buyer who is looking for a more specialized lender and can also be a red flag if every bank has rejected your mortgage application. It's important to consider your financial situation and the type of mortgage you want before looking for a mortgage broker. Here are some things to keep in mind when considering a mortgage broker.
What Experience Do They Have?
Before hiring a mortgage broker, you should ensure they have experience with the type of mortgage you want. Also, it is important to find out how long they have been in business and who their clients are.
How Much Does a Broker Charge?
A broker's fees can vary depending on the type of mortgage and the amount of work required. Your mortgage's prices and other costs will be stated in your home's contract you sign.
How Much of Mortgage Can they Handle?
Before hiring a mortgage broker, an important question is how much of a mortgage loan can they handle. For example, if you are looking for a $400,000 mortgage, you want to make sure the broker you hire has enough experience and resources to work with a lender that has that type of mortgage amount available.
What Fees Associated with the Broker?
If you consider hiring a broker, it is important to know what fees they will charge. You should find out how much the broker charges for their services and whether or not there are any hidden fees.
There are many different options when it comes to the fees they charge. Some brokers will work for a flat fee, while others may charge a percentage of the loan that is financed or your yearly income.
The type of fee you're charged should align with your risk tolerance. If you have bad credit and need help finding a mortgage lender, it may be worth paying more in fees instead of paying less and getting stuck without any help locating a mortgage lender. Make sure you know all of the details about their fee before committing to working with them.
How Long is the Process?
A mortgage broker can help a buyer find a lender in as little as two weeks, but the process can take up to six months, depending on various factors.
Is there an Evaluation Period?
In some cases, mortgage brokers may charge a fee for their services. It's important to ask if there is an evaluation period before you consider hiring the broker. If there is no evaluation period, you might want to consider what other criteria they use to decide whether you qualify for the loan.
Do They Work with Non-Profit Organizations?
We recommend that you ask the mortgage broker if they specialize in non-profit organizations. It's an important question as many buyers who are not purchasing a home for investment purposes will have their mortgages paid off quickly and need to refinance. Mortgage brokers can be helpful with this process and can also help buyers find lenders who offer better rates for longer-term mortgages.
What Type of Mortgage is their Specialty?
One important question to ask a broker should be about their specialty regarding mortgages. There are many different types of mortgages, and it's important to find a broker who specializes in the one you need. For example, if you are looking for a jumbo loan, it makes sense that you would want to work with a lender who specializes in jumbo loans. You can also ask them how long they have been working in that niche field and what their clients say about their services.
Whether you are a first-time home buyer or a long-time homeowner, choosing the best mortgage broker can feel overwhelming. But it doesn't have to be. The process is easier when you know what to consider before hiring a mortgage broker and see what they can do to help you with your home's mortgage.