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On the market for a mortgage? If you’re new to the process, or you just don’t have a lot of mortgage knowledge, finding a mortgage on your own might feel daunting. That’s where a mortgage broker can come in handy.
Working with an expert can make your loan process simpler and help you get the best rate possible. If you’ve been wondering how to find a mortgage broker, let’s look at how to work with a mortgage broker and see if that’s right for you.
A broker works on your behalf to find the best mortgage lender and mortgage rates for your needs. An individual broker or a brokerage firm does the comparison shopping for you, so you don’t have to spend hours researching and applying for different types of loans. A broker likely also has access to wholesale mortgage lenders, whose rates are lower than retail rates.Â
Whether a mortgage broker is right for you depends on your specific situation and goals. A mortgage broker can be very helpful throughout the home-buying process and help you get a better rate. Before you decide to work with a mortgage broker, take a look at your financial situation before taking the leap.
Sure, you could try to find a mortgage yourself. But if you have little knowledge of mortgages, it might be easier said than done. Working with a mortgage broker, on the other hand, can make the process a lot less complicated. Here’s what a mortgage broker can do for you:
In most cases, using a mortgage broker can be a pretty positive experience. There aren’t a lot of negatives as long as you take the steps to find a qualified, reputable mortgage broker. Otherwise, you could end up with someone who doesn’t pay attention to your needs.
If you’re pretty knowledgeable about the mortgage industry and have the time to research lenders and rates, you probably don’t need to use a mortgage broker. You can save yourself the brokers fee by doing the legwork yourself.
In exchange for their services, mortgage brokers charge origination and/or broker fees that you pay when you close on your house. Those fees are usually between 1% and 2% of your total loan and not something you pay separately. You can pay this fee all at once at the closing, or sometimes you can roll the fee into your mortgage loan.Â
Ultimately, the decision comes down to your preferences and whether you feel you can save time by using a mortgage broker. If you feel you can research loans and options on your own, you may prefer to work directly with a lender.
Mortgage lenders such as banks, credit unions and mortgage companies specialize in making mortgage loans directly to borrowers. Each has its own loans and rates. Because loan programs and qualifying standards vary from one lender to the next, it can be time-consuming for a homebuyer to shop around for rates and different loan options.Â
In today’s market, it’s not always clear if you’re working with a mortgage lender or a broker. Don’t be afraid to ask your mortgage company if it’s a lender or a broker. And don’t be afraid to ask if the company or individual is licensed and to research them with the Better Business Bureau, the Consumer Financial Protection Bureau, the National Association of Mortgage Brokers and the NMLS website.
To find a mortgage broker near you, start by getting referrals from a real estate agent or two if you can. Experienced agents, such as those found on HomeLight, can refer you to lenders they’ve worked with in the past.
You can also ask friends or family members who you know have recently bought a house. If they used a broker and were happy with the results, that’s a pretty good sign. Looking for mortgage brokers online can work too, but make sure to check as many reviews as you can find.
When you’re looking for referrals, ask the following questions:
If you decide to work with a mortgage broker, in addition to researching the broker, ask some questions up front so you know what to expect and can get a sense of what working with the broker will be like.
When you first meet with a broker, take a recent pay stub, your most recent bank statement, a driver’s license or birth certificate, a recent tax return and copies of recent credit card and other loan statements. A broker should ask you up front what you’re looking for, including the type of home, the type of loan, what your budget is and what your credit is.Â
Most importantly, when working with a broker, know that you’re the customer. The broker is there to serve your needs and help you. If at any time you don’t feel like you’re getting what you need, walk away.
December 13, 2023
Mortgages
June 7, 2021
Mortgages