Should You Hire a Mortgage Broker?

 In Mortgage

Buying a home can be confusing, especially when you’re doing it for the first time. From open houses to home inspections, it can feel like a stressful time, even while you’re elated to finally call your new place a home. Whether you’re on your third home or your first, navigating the lending waters and finding a mortgage that fits the bill can be headache-inducing.

That’s where a mortgage broker comes in.

What Does a Mortgage Broker Do?

Basically, a mortgage broker works with you to find a mortgage that meets your needs. They’re kind of like real estate agents, but for mortgages.

Think about it, when looking for a house, a real estate agent can take down all your requirements and then share the properties that best meet your needs. They work like a filter to make sure that the properties that are presented to you are ones that you’d actually be interested in. If you know you need 3 bedrooms and you share this with your realtor, they aren’t going to show you two-bedroom homes. It would be a waste of your time, and theirs.

A mortgage broker does the same thing. 

Basically, they sort through all the different types of mortgages that are out there—regardless of lender—to find the ones that would actually work for your particular situation. No more scouring the fine print and hopping from website to website—a mortgage broker can take the hard work out of comparing loans and lenders so that you can choose from a smaller subset that actually meets your criteria.

For example, let’s say there are a few smudges on your credit record. A mortgage broker who has experience helping individuals with credit problems get a mortgage knows just where to look and what mortgages are available for your situation.

Similarly, let’s say you have great credit and want a quick turnaround so you can nab your dream home before someone else does. Your mortgage broker can let you know which types of loan have the quickest turnaround time so you can get the keys as soon as possible. They work with you to help you meet your goals—and if you choose the right mortgage broker, you’re truly part of a team.

How Does a Mortgage Broker Get Paid?

There are two ways a mortgage broker can get paid. If you’re interested in a mortgage broker’s services, be sure to ask them about their fee upfront so it doesn’t become an issue later. 

Some mortgage brokers are paid by the borrower (i.e. you) during the closing process. Their fee is part of the closing costs and may be represented as a percentage of the mortgage. (And depending on your loan, you can ask to have your closing costs included in your loan. Just ask your mortgage broker or lender.)

Other mortgage brokers are paid by the lender, which means that the institution that is backing your loan will pay the mortgage broker. In this scenario, whichever lending institution you chose from the ones that the mortgage broker has provided to you will then be responsible for covering the mortgage broker’s fee.

Who Should Get a Mortgage Broker?

If you’re looking to save time and simplify the lending process, a mortgage broker may be able to help you. Because you’re essentially offloading the work of finding reputable lenders for your particular situation, you can focus on other aspects of the home buying process—like packing and getting ready to move to your new house.

While the internet has made it easier to learn about mortgages, it has also made it easier to spread misinformation. You can be knee-deep in conflicting information pretty quickly, especially when it concerns finances. Having a professional on your side can help you tell the real from the fake and get you the answers you need to make an informed choice.

If you’re looking to avoid the stress of shopping around, you can get an honest opinion and qualified advice from a mortgage broker. Plus, they’ll work on your behalf to find you the lowest interest rates on loans that fit your situation. Because of their experience, they know more about which lenders and loan types to turn to in particular scenarios. This can be a boon for first-time homebuyers who find their heads spinning at the mention of a fixed rate or an ARM.

By hiring a mortgage broker, you’re essentially asking a professional to weed through all the potential mortgages that you’d be eligible for to find the best ones, leaving you free to focus your energies on finding the right home.

What You Should Look For in a Mortgage Broker

Some realtors work with a particular mortgage broker. This is a good way to find an individual your realtor has found to be reputable. You can ask your realtor for a recommendation. Some companies even have someone in-house so they can better serve their clients. However, you don’t have to use that mortgage broker. You can always seek someone else if you’d like. Ask family and friends for recommendations or look online for someone in your area.

A mortgage broker should have experience and be able to share information about the past loans they’ve helped close. Ask about their history as a mortgage broker and if they’ve worked with clients in your situation before. This can help clue you in as to how they help their clients and the kinds of results you can expect. You can also ask for references and seek reviews online to see what others have to say about the mortgage broker. 

Mortgage brokers are licensed professionals, so feel free to ask about their licensing too.

The Easy Way to Apply for a Mortgage

If you’re looking for a mortgage, you can skip the hunt and apply for a loan right now. We’ll help you parse the difficult language and explain everything. Start our online application now or give us a call at  813-445-8694. We can’t wait to help you!

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