Your home is probably the most expensive purchase of your life, making it essential to get the best possible deal you can on a mortgage, when even a slight difference in the interest rate can mean savings of several thousand dollars per year. The Internet has made it fast and straightforward to be approved for a mortgage, often within minutes, although there are several reasons why it will pay you to use a mortgage broker.
A good mortgage broker understands the industry, and makes a point of staying up to date with industry trends and regulations. A good broker is aware of the different products you may qualify for, and the different lenders offering them. Your broker will take the time to shop around for the best deal, and also probably has an extensive list of industry contacts. Not all mortgage products or options are widely promoted or marketed, and most buyers applying for a mortgage understandably don’t bother contacting more than one lender. Applying for a loan can be time consuming and confusing; a good mortgage broker can speed up the process and help you to make sense of it all.
And some lenders only work with a mortgage broker, although there isn’t really an easy way to know who they are unless you use the services of a broker. In addition, a broker is sometimes able to get a lender to waive some of the fees that are typically assessed during the application process if they have a positive relationship with them, such as origination, appraisal and application fees. These fees can really add up, as any home buyer will verify, making this a potentially useful benefit.
Most mortgage brokers are a lot more accessible, and prepared to go the extra mile to make sure you find the ideal moan for your situation. Unlike bank employees, your broker won’t get paid unless you successfully close your loan, meaning they have an obvious incentive to make sure the outcome is successful. And after you have closed on your home, you may still be able to benefit from the expertise of your broker; many may be able to recommend or offer competitive rates on life insurance or property insurance.
You can typically expect your broker’s fee to be around 0.7 percent of your loan amount, although it’s well worth it, given the amount of money you can potentially save over a 30 year period.