Does It Cost Anything To Work With A Mortgage Broker?
If you are contemplating using a mortgage broker, you may be wondering if their services will cost you anything as the customer. The answer is no. Mortgage brokers earn their money by referring clients to lenders.
They work with many different lenders to find a mortgage that suits your particular needs. Also, they will help you find the best mortgage and rate for your particular needs.
Brokers earn a commission from the lender and the amount they earn depends on the type of mortgage and what the lender offers as a percentage. Typically, the fee is between half a percent and 1.20% of the mortgage amount. Some articles were written warning of possible favouritism by a broker towards a particular lender. Although, a professional mortgage broker is bound by a code of ethics. They are there for you, not to earn a premium from one particular lender. Besides, the fees earned by brokers are nominal. Considering the services they offer and the fact that you are never billed, using a mortgage broker makes perfect sense.
Here are just a few of the advantages that using a mortgage broker offers:
Multiple Lenders
Many potential home buyers go to their bank because they are already established there and it’s easy. However, using a broker may actually be easier and more beneficial. Not only will the broker get to know your specific needs, they will also have more lenders to choose from to find you the right terms for you. Your bank crunches your financial numbers to see if you suit their product. Consider that this will likely be the biggest purchase you make in a lifetime. Does it not make more sense to have the product fit you instead?
Relaxed Application Process
One of the greatest bonuses of making application through a broker is the laid back process. A broker will walk you through each step, help you with documentation and discuss the pros and cons of your credit history. A good broker will also discuss ways you can strengthen your credit if it is less than pristine. Incidentally, you can still get a mortgage even if your credit is not perfect. Typically, this is highly unlikely with any of the major banks. Getting pre-approval through a broker is a good way to discover if there are any problems before you actually want to buy. That way, they can work with you to find solutions. If you apply through a bank, this is rarely the case. You will just be turned down.
Lower Overall Costs
A broker is working for you and knows the business. Even if you are following who has what rate for a particular type of mortgage they will be aware of additional avenues for funding. There are many private lender and private programs that are not available to the public directly. Better terms, such as a lower interest rate, flexibility for lump sum payments and less stringent payment options can save you thousands of dollars over the span of the mortgage.
Extra Services
Besides the fact that they are there for you throughout the application process, most professional brokers are also well-connected with realtors, lawyers and other industry professionals. From application to escrow, a broker will keep you in the loop about the status of your loan. Allowing the process to be as seamless as possible.
A competent certified mortgage professional can save you time, money and frustration, plus their services come at no charge to you. Find the product you need and avoid being pigeonholed into the products of the big banks. Contact us here to speak to one of our mortgage professionals. Lastly, find out how you can save thousands by shopping around for the best rate before you buy a home.