When buying a home, there is no doubt you are looking at making one of the most expensive financial decisions of your lifetime. If you are already a home owner, you will already know this to be true.
Whether or not you are a first time home buyer or looking to place your current home on the market and buy another home, the issue of obtaining a mortgage is likely to come up. The process of securing a mortgage can be rather daunting for a variety of reasons – on top of the financial enormity of the situation.
Fortunately however, mortgage-goers are not alone in this process. On the contrary, many home buyers choose to enlist the services of a mortgage broker when looking to obtain the funds they need to purchase their new home.
While traditionally, banks and loan providers have been used for this same outcome, more and more these days, buyers are turning to a mortgage broker instead of a bank when it comes to their home purchasing needs.
Here are 2 reasons why buyers are opting to use mortgage brokers over banks.
1) Mortgage Brokers Have Access to Non-Traditional Lenders
First and foremost, while banks are more likely to provide a certain rate and that is that, mortgage brokers are often more motivated and able to find better rates. Since, brokers tend to work with a network of non-traditional lenders who can provide a variety of rates, the rates they provide can be lower than the ones that banks can offer.
In this instance, brokers seem to offer homebuyers more options when it comes to mortgage rates and terms, and this in the long run can save them a fair bit of money. All in all, approval rates for home loans are also higher, as mortgage brokers already have a report with certain lenders, who are perhaps more willing to provide a loan to someone with less than perfect credit.
In the end, if you don’t have the best credit, by going with a mortgage broker, not only are you more likely to obtain the mortgage you need, it is also more of a guarantee that they will find you the lowest rate possible.
2) Mortgage Brokers Handle the Negotiations & the Legwork
The reality is there is a lot of legwork that goes into not only finding the right mortgage, but also going through the mortgage process itself. This includes filling out paperwork, not to mention trying to understand the overall features of your new mortgage.
As mentioned, if you go into a bank or other loan provider on your own, you are responsible for negotiating the terms of your mortgage. Also as mentioned, banks tend to only offer a limited variety of loan rates and terms, often times with these rates being a lot higher.
With that being said, another major reason that buyers may opt to steer clear of traditional banks in lieu of a broker, is because brokers can perform these negotiations on their behalf. They know all of the mortgage jargon and which lenders will be more open to offering certain mortgage rates over others. By doing so, brokers are providing a very valuable service, as this relieves a lot of stress associated with the mortgage process.
In addition to being the mortgage ‘middle men’ and saving them money, such as in interest rates, brokers can save home buyers money on certain mortgage fees that they would otherwise have to pay for when dealing directly with a bank. For example, an added benefit of going with a broker is that they are often willing to cover the cost of mortgage fees, such as the appraisal and the inspection of your home.
When all is said and done, the entire mortgage process can be overwhelming, even sometimes a bit confusing. A mortgage broker however, is not only able to help walk you through this sometimes convoluted process, but can also perform a lot of the necessary legwork for you, while saving you quite a bit of money at the same time.
It is of course important to keep in mind that not all mortgage brokers are created equal. As a homebuyer, you will want to look into their reputation, as well as the nature of their fees before you move forward with this arrangement.
As you look to take this financial step, remember to take into account all the ways that a reliable and qualified broker can assist you with this major financial milestone.
