What Exactly Does A Mortgage Broker Do?

What exactly does a mortgage broker do? The short answer is that a mortgage broker is a professional who manages the mortgage process for you.

The longer answer about what a mortgage broker does revolves around the three specific ways they manage the mortgage process for you. First, they either assist you with loan applications with various lenders or they outright handle them for you. Second, they find the most competitive and favorable interest rates. Third, they negotiate the particular loan terms you will be dealing with.

Narrowing down the hunt for your next home, hopefully your dream home, is something you can make quite a bit of ground on by yourself. However, you can’t really dive into the process of finding the specific home that will be yours without having some idea what kind of mortgage you can get or afford. Otherwise, you’ll possibly overshoot and find a home that’s worth more than you can borrow. You might even settle on a home that is worth less than your spending power, meaning you buy something too small. This is why it’s smart to partner up with a mortgage broker that can guide you through the entire lending process from beginning to end.

Even if you aren’t yet sure of what a mortgage broker is, which is likely if you decided to look up this particular content, you probably still knew the term. Other family and friends that have bought homes have likely mentioned mortgage brokers, and your real estate agent has likely talked about these professionals too. Still, they’re not the same as loan officers at banks.

A mortgage broker is basically a middleman serving as a bridge between you and any of your possible lenders. The job and function of a mortgage broker is acting on your behalf with multiple lenders to find the specific options with the best interest rates for your circumstances and budget. Mortgage brokers typically have a carefully crafted portfolio of lenders that they deal with, which saves you a lot of legwork.

Mortgage brokers aren’t just financial professionals. They are specifically licensed for this kind of work, and their industry is regulated. They do quite a bit of the work for you, be it accessing your credit history or handling the verification of your employment and income, before using such information to apply for several different loans for you quickly.

Once you choose the lender and loan that you think would best fit you, the mortgage broker works with the underwriting department of that bank, your real estate agent, and the closing agent, which is typically the title company. They do this to make sure that the transaction proceeds smoothly from the start all the way up to closing day.

Mortgage brokerMortgage brokers can be paid in different ways. Lenders are usually the ones that pay them, but they can sometimes be paid by the borrowers as well. However, they never get paid both ways at the same time. Lender-oriented compensation plans typically pay brokers a percentage of the overall loan amount. Half a percentage point up to 2.75 percent is a common range.

Please note that this is for general information purposes only and you should contact your local broker such as Mortgage Broker North Shore to discuss your personal circumstances.

The Advantages Of A Mortgage Broker

If you are looking for a mortgage, it can be hard to determine where to start. While you can use a comparison website working with a mortgage broker may be the better option. There are many advantages to mortgage brokers that place them ahead of comparison websites and looking for a mortgage on your own.

Saving Money

Your mortgage is likely to be the largest debt you have in your lifetime and you want to save some money on it. Mortgage brokers will be able to look for the best deals on the market based on your financial situation. While it is possible to use trackers and comparison websites to find the lowest rates, mortgage brokers look further for money saving.

They will consider the fees and conditions of the mortgage. After all, you will not save money if you have a low rate but very high fees. The overall term of the mortgage is also important if you want to be able to save on the repayments.

Saving Time

Looking for a mortgage can be time-consuming and most people do not have the time to go into the detail necessary to get the best mortgage. Looking at mortgages and understanding the products is all a mortgage broker does. This means they already have the understanding of the market necessary to find and get the best deals.

Working with a mortgage broker can save you a lot of time and not only when searching for a mortgage product. They also save you time when it comes to applying for the mortgages. They know how all the lenders work and whether or not you will be eligible for certain mortgages. This saves you time applying for a mortgage that you are not qualified for.

The Range Of Mortgages

There are many mortgage lenders who are not on comparison websites. These lenders might be the best ones for you, but you will have a hard time finding them if you do not already know about them. Mortgage brokers know about them and they have access to a wider range of mortgage products than you will have.

Of course, this depends on the broker you are working with. There are some brokers who are tied to specific lenders and will not provide you with products from every possible lender.

Getting Financial Advice

advantages of a mortgage broker - northern beachesMortgage brokers not only find the best mortgage for you, but they are also qualified to give you financial advice. If they feel you are not in the best financial situation for a mortgage, they can help you get there. They will also be able to provide advice on how to handle the mortgage once you have it.

Mortgage brokers offer a lot and many people are not aware of this. While you can look for a mortgage on your own, you will not have the same access as brokers or their understanding of the products. Mortgage brokers can also save you time and money while providing you with any advice you need.

The Information Needed for a Home Loan Application

What information is needed for a home loan application (2)Have you found the home of your dreams? Are you ready to take the leap and become a homeowner? Then a home loan is no doubt something that you have considered applying for. But just what information is required to apply for a home loan? In this article, we will discuss just that.

1. Your Credit Score

Your credit score is one of the most important factors in whether or not your home loan application will be approved. Your score lets a creditor know how risky it would be for them to lend money to you, and your likelihood of paying back any loan you are approved for. In addition, your credit history that goes hand-in-hand with your score will show a potential lender any unsettled accounts of yours and whether or not anything related to you has been sent to collections.

2. Proof of Income

Your proof of income can be a W-2, a collection of your most recent paystubs, tax return statements, et cetera. You will need these items in order to show a potential lender your overall financial state as well as how you plan to receive income moving into the future. This will show the creditor your ability to pay on your home loan and whether or not the home you are applying for is safely within your budget and means.

3. Bank Statements

In many cases, a potential lender wants to know that if an emergency arises you will have several months of mortgage payments set aside. Therefore, you may want to come prepared with bank statements that show any finances you have saved for just that type of scenario.

4. References and Renting History

While you may not always need this, especially if you and any co-signers you plan to use for your home loan application have a decent credit score, references and your renting history can only aid your chances of being approved. If you have rented a home you may want to list any previous landlords to back up the fact that you have paid your rent on time and been an individual worth trusting to make payments.

The bottom line is that your potential creditor wants to know that, if you receive a home loan, the amount of risk associated with you is low. Be sure to bring any information related to your assets and income, as stated above, any co-signer for your home loan application, and of course, your identification. Check with your local mortgage broker for more information.

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