Even if you have bought a house before, you may still be asking yourself, “Do I need a mortgage broker?” These 6 reasons might convince you that you do.
About 5 million homes are sold every year in the United States. If you’re looking to snap up one this year, there’s plenty of real estate to choose from.
Buying a home, especially as a first-time buyer, is an amazing experience. The thrill of sampling multiple properties as you search for your dream home is unrivaled.
However, when it comes to closing the deal, things can get trickier, particularly if you are relying on mortgage financing. From getting pre-approved to getting the deal over the line, the process can be taxing.
It’s for these reasons most buyers bring a mortgage broker on board.
So if you’re asking “do I need a mortgage broker,” the answer is probably a yes. Here’s why.
1. Understand How Mortgage Lending Works
If you’ve never taken out a home loan before, you certainly lack an intricate grasp of how mortgage lending works. As such, you’re bound to make poor decisions if you try to navigate the processes on your own.
On the other hand, an experienced mortgage broker knows everything about the mortgage lending and real estate industries. It’s what they do every day.
A broker will help you develop a clearer picture of your finances. They will analyze your credit report, income streams, and other financial information and give you an estimate of the amount of home loan you can secure, and how much you’ll need to put down as a deposit.
This will enable you to make a well-informed decision regarding the type and size of property to buy.
For instance, if the broker estimates that the maximum amount of money you can secure is $300,000, you will know that you’ve no business looking for million-dollar homes – unless you have the rest of the money stashed somewhere.
2. Get the Best Rates in the Market
From their name, you can tell that mortgage brokers aren’t tied to any lending institution. Their job is to gather information on as much mortgage products and help you find one that best suits your needs.
As such, when working with a mortgage broker, stay assured that you’ll get a mortgage with the best rate – of course depending on your specific financial situation. In fact, in a bid to get more business, some mortgage lenders extend special interest offers to certain brokers. If you’re lucky enough to hire a broker with such offers, chances are you could secure an attractive mortgage.
What if you’re hunting for a mortgage on your own?
First, you’ll be overwhelmed by the sea of mortgage products out there. Because you don’t know how to spot the best product, you could end up making costly mistakes.
Second, you could fall victim to a mortgage scam.
3. You Don’t Have to Worry About the Paperwork
The mortgage lending process is notoriously bureaucratic. There are lots of paperwork to be filled out.
Left to your own devices, you could make clerical mistakes that will only delay the pre-approval process.
A mortgage broker will handle all the paperwork. All you’ll do is supply the required information and documentation.
4. Get Referrals to the Best Realtors in Your Area
After getting pre-approved for a mortgage, you’re ready to hit the market and find the right property.
But before you drown in excitement, how well do you know the real estate market in the area you’re looking to buy your home?
If you’re a novice, it’s not advisable to house-hunt on your own. You need a real estate agent or realtor on your side.
Now the question is: where do you find a reliable agent?
You could do an online search and start vetting agent by agent, but that will take a lot of time. You need to be in the market checking out, lounges, kitchens, patios, and swimming pools, not vetting people.
If you have a mortgage broker, feel free to ask them to recommend a real estate agent. The paths of brokers and agent cross often, so it’s not uncommon for them to send potential clients to each other.
Count on your mortgage broker to lead you to an experienced real estate agent.
5. Buying Overseas Property? Get a Mortgage Broker
Sometimes you might find yourself needing an overseas property.
Perhaps you’re looking for a vacation home in an island country or you’re relocating for work. Either way, purchasing property abroad has its fair share of challenges, more so when you’re going the mortgage route.
The smart thing to do is find a mortgage broker in that foreign city you’re moving to.
Sure, hiring an overseas broker can be difficult. You just don’t know who to trust.
The good news is there are online tools that can help you make the right it. If by any chance you’re moving to Brisbane, Australia, Hunter Galloway has an informative post on how to find the best mortgage brokers. Check it out!
6. You Could Save Some Fees
Origination fees, appraisal fees, and application fees are some of the expenses you’ll typically need to take care of when applying for a mortgage.
These fees can put a dent on your budget, especially if you don’t have a lot of wiggle room.
A mortgage broker might be able to help you save on these fees. They can use their negotiation skills to get your potential lender to waive or lower these fees.
You might save as little as 500 bucks, but in the larger scheme of things, this is good money. You could use it to pay a moving service when you’re finally ready to move into the new home!
Do I Need a Mortgage Broker? Yes!
At the start of the article, you were on the fence about getting professional help. But now if you’re still asking “do I need a mortgage broker?” the answer is an unequivocal yes.
A mortgage broker will not only help you understand how the process works but also help you find a suitable lender offering the best rates. They’ll also ensure the deal gets over the line.
Good luck as you walk into your new life as a homeowner, and be sure to keep tabs on our home section for more realty insights.