If you have ever applied for a mortgage or any other type of installment loan, then you know it’s a stressful process full of bureaucracy.
But this doesn’t always have to be like this. Here, at SafeLoan, we understand that people want to receive loans from a trustable source as soon as possible.
That’s why we look at important factors such as the credit score and income ratio. Still, this is not the only option to get a loan, and you know it.
Today, we will talk about mortgage brokers. Financing the home of our dreams can be achieved by multiple alternatives.
One of them is the aforementioned mortgage brokers, and the other one is direct lenders.
Working with direct lenders will make you save more money, but a mortgage broker is also a good option if you haven’t made a firm decision.
Thus, if you are wondering if you can actually trust mortgage brokers, then this blog post is for you. Without further hesitation, let’s understand how they work and if they are a reliable alternative to achieve our goals.
First of all, we must understand what mortgage brokers are before deciding if we are going to work with one.
Imagine that you want to finance a new property, but you don’t know where to begin.
You might know some lovely locations for you, or you already understand your space needs inside the home.
Well, a mortgage broker isn’t more than a middleman that helps you connect with potential lenders.
There are a lot of lenders in the market, so selecting just one is a monumental task for most people.
As you already know, we are not mortgage brokers; we are direct lenders. So, we will provide you special customer service with staff prepared to solve your needs.
Instead, a mortgage broker will give you lots of lenders options so you can select the one that better fits your needs.
Of course, it’s fundamental to check if a particular mortgage broker is correctly licensed and regulated before working with them.
These professionals will help you gather all the documents needed to apply for a loan.
They will deeply analyze your credit history, verified income, and individual needs in order to complete the application process for a loan successfully.
The first thing that you should ask yourself is whether you have enough time to look for mortgages on your own or not.
Don’t get us wrong, working with mortgage brokers will for sure help you save a lot of time. On the other hand, working with a direct lender is the best way to save money during the process.
Still, you will need to compare each lender found by proper research performed by you. This can take days, even weeks, of your life.
So, is a mortgage broker the right choice for you?
Consider that applying with direct lenders is not an easy task sometimes. It depends on the lender, but if you are not willing to invest days to find the best deal, then stop comparing.
Mortgage brokers do all of this work for you. That means that you get to save precious time, but, naturally, you will need to pay for it. And that’s the next section of this blog post.
Basically, mortgage brokers can be paid in three ways: you can pay them by yourself, the borrowers can also pay for them, and, finally, they are most often paid by the lenders.
Keep in mind that brokers should be as transparent as they can when presenting how much money you will pay in fees.
Consequently, this creates competition. The brokers’ charges depend on the market, the city, and the federal laws of each state.
Nobody wants to put their money at risk. That being said, one of the best ways to find a mortgage broker is by direct recommendations and referrals.
In that case, it is up to you to understand the broker’s services and level of knowledge. If you feel that you have top-notch requirements, then the best course of action is to work with an experienced broker.
Some real estate companies have in-house mortgage brokers, but this is not always the case. It’s not easy to find the right mortgage broker, but if you believe that you found the right individual, then go for it.
Now that you understand what mortgage brokers are, it’s time to discuss the advantages and disadvantages.
At this point, your specific requirements about the home you want should be clearly established.
But knowing this, you can make a firm decision regarding if it’s good to work with a mortgage broker or not. Among the advantages, we have these factors:
- Time will be saved: this is a fact. Brokers have contacts, a lot of them. Hence, you won’t need to spend hours researching to find the right mortgage – let them do all the work for you.
- Some brokers have better options: sometimes, lenders give exclusive offers to brokers so they both can get more clients. Thus, they can help you obtain special rates from lenders, but it all depends.
- They will manage all the paperwork: forget about bureaucracy. Of course, you will still need to present some requirements, but it’s less trouble when working with a mortgage broker.
And now, let’s talk about mortgage brokers’ disadvantages:
- They don’t consistently deliver what you expect: we cannot stress this enough – this depends on your requirements. For instance, you might find a better deal without their help if you research by yourself.
- You need to pay a broker fee: we already mentioned this. Brokers need to be paid, so be expected to spend more money than if you worked with a direct lender.
Trust issues: we won’t generalize, but, sometimes, the broker’s interest might not align with your own. At the end of the day, brokers just want to sell to get revenue. They might put aside the “customer service” aspect in some cases.