If you are considering buying a home, you may want to consider getting a mortgage broker in addition to finding the perfect real estate agent. Just as a real estate agent finds you the perfect home for your needs, a mortgage broker finds you the ideal home loan to pay for your dream house. Check out these three facts you should know about mortgage brokers.
They Help You Find a Great Loan for You
Once you find the home you want, you need to pay for it, and unless you have enough cash to pay for the house outright, you'll probably need to take out a mortgage or a home loan. Without a mortgage broker, you'd need to find a bank and speak with the bank's loan officer about potential loans. Unfortunately, the loan officer works for the bank, so they may not have your best interests at heart. In fact, they may be unable to bend the rules or negotiate a better deal.
A mortgage broker, however, doesn't work for a lender, so they aren't just looking for any lender or loan. They are looking for the right deal for you. Once they find a lender that works, they have more leeway to negotiate a better deal on your behalf because they aren't employees of the bank. Plus, they have the experience and knowledge in their corner to be able to negotiate.
Some Lenders Prefer Brokers
Because mortgage brokers are experienced and knowledgeable, some lenders prefer to work with brokers. This is because the process is much smoother when everyone involved understands the same terminology and understands the process. This allows everyone to start at the same playing field when negotiations begin.
If you don't fully understand the home loan process, rules, regulations, patterns, etc., you are more likely to negotiate outrageous terms without even realizing it. This only will disappoint you because you won't get what you want, and it will draw out the loan process. For this reason, some lenders only work with brokers. Of course, this is beneficial for you because the broker is still fighting for what you want, so you are more likely to get a realistic loan that meets your needs.
They Are Held to Strict Standards
In the past, not everyone trying to help you find a mortgage was trustworthy. However, thanks to the Dodd-Frank Act, mortgage brokers are held to strict standards to prevent them from taking advantage of you. For starters, they are not allowed to bully or manipulate you into choosing a bank you don't want in return for getting a bonus from that bank. This is to prevent the broker from getting paid twice: once from you and once from the lender.
Another important benefit of this act is that it prevents the mortgage broker from tying their pay to your interest rate. In other words, they can't get paid more just because your interest rate is higher. Instead, they are paid based on the total loan amount. Typically, they are paid about one to two percent of the total loan amount. This can be paid by either you or the lender. Lastly, the act also prevents brokers from charging you hidden fees.
You don't have to hire a mortgage broker to find your home loan, but it definitely makes the entire process much easier. They find the right lender for you and negotiate the terms with their experience and qualifications. You can trust a mortgage broker to do what's best for you and your family. For more information regarding mortgage brokers and how they can help, contact one like Cornerstone Residential Mortgage in your area.