Home Loan Basics: Should You Work with a Mortgage Broker?

Home Financing LoanIf you are planning on purchasing a house, you’re probably going to take out a mortgage to pay for it. When shopping for a mortgage, you could deal directly with lenders or banks, or get a mortgage broker to do the legwork for you.

A mortgage broker is a middleman or go-between between you and a mortgage lender. The broker will look for mortgage deals that specifically fits your financial circumstances, help you with the application and pre-approval, as well as the settlement process. Mortgage brokers won’t charge you anything since they only get a commission once you’ve settled a mortgage that they brokered for you.

Why Work with a Mortgage Broker?

There are significant benefits to working with a mortgage broker, but the key benefit is helping you shop around for a mortgage deal that you could comfortably afford. Shopping around is crucial to get the best possible mortgage deal, but it’s time-consuming and frankly overwhelming, particularly if it’s your first time applying for a mortgage, explains an experienced loan officer from Primary Residential Mortgage, Inc. in Fort Myers. If you work with a mortgage broker, however, he or she would do all the research for you, narrow down the best deals, and obtain multiple quotes from multiple lenders so that you could go over all the options available to you.

Also, banks and lenders have varying requirements, and unless you are very familiar with these requirements, you risk missing out on a mortgage deal just because you failed to provide the necessary requirements. Mortgage brokers could likewise negotiate with lenders to waive certain fees to reduce your mortgage-related expenses. Working with a mortgage broker could also be valuable if you’re looking to purchase another home, refinance your existing mortgage, or purchase an investment property.

Should You Work with a Mortgage Broker?

It’s certainly advantageous to work with a mortgage broker, but this does not necessarily mean that you must work with one. But if you want to work with a broker, look around for experienced brokers and do your due diligence—ask family and friends, read reviews, and ask for references. Put simply, just like shopping around for a mortgage deal, explore your options so that you could find a broker that has your best interests in mind. After all, the slightest difference between mortgage rates could mean thousands of dollars in savings over the course of a home loan with a 30-year term, and a reputable mortgage broker could help you in achieving this.