Buying a home is likely going to be the biggest purchase you will make over your lifetime. Particularly if you are a first-time homebuyer, the process might feel overwhelming. To that end, having an experienced professional guiding you through the process makes all the difference. This is where a mortgage broker comes in.
What is a Mortgage Broker?
The experts at Mortgage Maestro explain that a mortgage broker acts as an intermediary between you and potential lenders. They don’t work for any specific bank or lending institution. Rather, a mortgage broker shops the mortgage market on your behalf to find you the best loan options.
Mortgage brokers have established relationships with many lenders. They know what loan programs each lender offers and their qualifying guidelines. This market knowledge allows brokers to quickly determine the lenders most likely to approve you and offer competitive rates and terms.
The Power of Choice
A massive advantage of using a mortgage broker is the choice you have. An individual bank or lender will only offer you the loan products they have available. This limits your options. A broker has access to hundreds of loan products across numerous lenders.
For example, there are those lenders that specialize in loans for first-time homebuyers or individuals with past credit issues. Your broker will know which lenders offer programs tailored to your specific situation. When you have more choice, the better your chances of finding an affordable mortgage will be.
Helping You Qualify
Another benefit of using a mortgage broker is their invaluable help when it comes to your loan application. Brokers are experts in lending guidelines. They know what underwriters from different lenders look for in borrowers.
Your broker will review your financial situation and make recommendations to qualify for the most favorable loan terms. For instance, they may suggest paying down balances on revolving credit accounts or provide tips for explaining past credit problems to lenders.
Guiding You Through the Process
More importantly though, an experienced mortgage broker will guide you through the entire home-buying process. They will help you with the documents required to complete a mortgage application and try to get you pre-approved for a loan.
Your broker will also coordinate the flow of paperwork between you, the lender, real estate agent and title company. To avoid any surprises, they will also let you know what to expect at each stage of the process. Having an expert oversee the process reduces stress and helps your purchase go smoothly.
Helping You Make Smart Choices
From loan type and down payment amount to interest rate and fees, you will make many financial decisions during the home buying process. Your broker will help you understand the implications of each choice so you can make informed decisions.
For example, your broker can run the numbers to show if it makes more sense to pay discount points for a lower interest rate or not. They can explain the costs associated with various loan types and down payments. Smart choices result in better loan terms and long-term savings.
Negotiating in Your Favor
Mortgage brokers are also experienced negotiators. Not only will they negotiate rates and fees with lenders on your behalf, but some brokers can also negotiate with real estate agents for lower commissions. This saves you money at closing.
Your broker will handle much of the mortgage application workload for you. Their skills, connections and negotiation abilities make the complicated process of buying a home much smoother. Hooking up with the right broker will help you get into that dream home with a financing solution that fits your needs and budget.