When it comes to buying a home or refinancing, it can be difficult to navigate the market and find the best loan for your particular needs and situation. That's why many people turn to a mortgage broker for help. A mortgage broker is a licensed and regulated financial professional who acts as an intermediary between borrowers and lenders. They can provide you with a formal comparison of recommended loans and guide you to information that accurately describes the differences in costs, reflecting the current rates, points and closing costs of each loan.
Mortgage brokers offer a wide range of mortgage loans from different lenders. The greater the broker's experience and network, the greater your chances of obtaining the loan product and interest rate that best suits your needs. With a mortgage broker, you only need one application, rather than filling out forms for each individual lender. A reputable mortgage broker will disclose how they are paid for their services and detail the total costs of the loan.
Mortgage ratio discounts are special loan terms offered by financial institutions if you have other types of accounts with them. For example, savings could consist of a lower interest rate or reduced fees on your loan. Lenders that offer relationship discounts may require strict minimum asset requirements to be eligible, and switching banks for this discount may not always pay off. A mortgage broker helps all types of borrowers get the best deal, and this commitment can be especially useful for borrowers with unique circumstances, such as bad credit or a desire to buy a certain type of property.
If you're looking for an FHA loan or a VA loan, for example, a mortgage broker who has experience working with those loans can simplify the process for you. At closing, the mortgage broker charges a borrower or lender fee of between 0.50% and 2.75% of the total amount of the loan, depending on the broker's fee structure and whether they are paid by the mortgage lender or the borrower. Lenders offer loans in bulk to a mortgage broker and can therefore offer the best rates available in the market, which typically reduces the total cost of the loan to the customer. Ultimately, you have a responsibility to find the best mortgage provider, whether through a broker or a loan agent, and to look for the best rate and lowest costs. Working with a mortgage broker to navigate today's market can be a wise decision, especially for first-time homebuyers.