Are you narrowing down the search to purchase your dream house and looking for the best loan to make it come true? Then hiring an experienced mortgage broker can be the quickest way to help you go through the complicated lending process, from working with different lenders, finding the lowest options to negotiating terms and helping you get an approval. Here are four important things you should know before deciding to hire a mortgage broker.
Who is a mortgage broker?
In simple words, mortgage brokers are similar to the middlemen between potential lenders and borrowers. Their major job is working on behalf of the borrowers with several financial institutions to find the best home loans with the lowest fees or interest rates. Most mortgage brokers can perform these tasks quickly and efficiently as they have a broad network and good relationship with many. Mortgage brokers are often financial professionals who are licensed and experienced. They perform all the paperwork, from collecting necessary documents, pulling the credit history to verifying your employment and income.
How to pay for a broker service?
Just like other service providers, mortgage brokers also charge a small commission, also known as the mortgage origination fee. In most case, this is approximately 1% of the mortgage amount and should be paid by a borrower. Sometimes, mortgage brokers might negotiate no-cost home loans so you do not need to spend extra upfront money. Instead, they will be paid by the lenders after closing. However, selecting a no-cost mortgage might increase the interest rate, thus costing more money over time.
Why hire a professional mortgage broker?
For beginners, a mortgage broker can be the personal loan adviser who performs all the paperwork for you. All you need to do is to provide him or her the necessary personal information and wait for the application to be approved. Another benefit of hiring loan brokers is that they have a good relationship with many national, regional and local lenders. Thus, you can have more opportunities to get home mortgages with the lowest rates.
It is also important to know that some lenders and banks work exclusively with mortgage brokers, one of them being Adelaide RHL, so the only way left for you is to get their help. More importantly, you can save a lot of time and efforts with a good mortgage broker. Sometimes, it might take hours to perform daunting tasks in the application of different loans such as back-and-forth communications, frequent updates on personal information. Why don’t have them done by professionals to save you from the hassles?
Why do without mortgage brokers?
As said earlier, most mortgage brokers often charge about 1 per cent of your mortgage amount for their services. In other words, you might expect to pay approximately $2000 if you want to borrow $200,000. Using a professional for lending processes would also narrow your chances of accessing a few large lenders. After the housing collapse in 2008, some major financial institutions decided to step away from wholesale loan lending and stop working with brokerage companies.