It is no doubt the home buyers who want to enlist the services of a mortgage buyer so they can only get the best terms and rates. Certainly, working with a competent, knowledgeable and experienced mortgage broker can help you find the right mortgage. However, you must know that there are both pros and cons that you have to consider prior to committing to one.
Pros
They have more access – There are some lenders who exclusively work with mortgage brokers and depend on them to become the gatekeepers in order to bring them suitable clients. Also, they can get special rates from lenders because of the volume of business generated which might be a lot lower than you can get on your own.
You can save some fees – There are many various fees that might be involved when taking on a new mortgage or perhaps when working with a new lender. These fees include application fees, appraisal fees, and application fees. Know that mortgage brokers can be capable of getting lenders to waive some or even all these fees, saving you a significant amount of your finances.
It will save you the legwork – Since mortgage brokers have contact with lots of variety of lenders, you do not have to call up dozens of lenders and compare their mortgage rates and terms on your own. Indeed, a broker can save you the time, hassle, and headache of having to do that. Also, a broker can steer you away from lenders with tedious payment terms contained in their mortgage contracts.
Cons
The broker’s interest might not align with yours – Of course, you, as the home buyer, would want to get an affordable mortgage. On the contrary, a broker’s goal is to get you into a mortgage that will maximize their compensation.
You might not get the best deal – Lots of homebuyers will assume that a broker can provide a better deal as compared to what they’ll get on their own; however, you must remember that this is not always the case. There are some lenders offering homebuyers similar terms and rates that they offer mortgage brokers. It is indeed a smart idea to shop around on your own to determine if your chosen broker is really offering you the best deal.
Brokers don’t guarantee estimates – If a broker first represents you with offers from lenders, they usually use the term “good faith estimate.” What this means? Well, this means the broker strongly believes that the offer will embody the final terms of the deal (take note that this is not always the case). There are actually some instances where the lender might change the terms,basing it on your actual application and you might end up paying additional fees or a higher rate.
Understanding the pros and cons of hiring a mortgage broker will help you determine if enlisting the help of such professional will benefit you in the long run or not. Always be reminded that a knowledgeable homebuyer will most likely come up with well-informed investment decisions.
About the author: Oliver Finney is an enthusiast of the real estate industry who loves to continuously learn and share knowledge as well about the vast and comprehensive world of the real estate business, off and online. He usually reads relevant books and checks out sites like http://empowerwealth.com.au to boost his know-how about the industry.
