Getting a mortgage is a slog. There are no two ways about it. It’s a headache trying to find the best deal and jump through all the appropriate hoops at the same time. It’s even worse for first time home buyers who usually have little to no idea what they are dealing with. That’s where a mortgage broker comes in. A middleman who saves time by doing the legwork for you, hunting out the best deal and connecting you directly to the lender you need. But a mortgage broker is only human, just like the rest of us, so should you use one?
The advantages of using a mortgage broker
A broker is an expert in his field. He uses that expertise to guide you through an otherwise untenable landscape of loans, lenders and rates. They may even be able to get you better deals than you could get from going through a traditional bank.
A good mortgage and finance broker like Blutin Finance will be able to walk you through the rough patches. They can help you figure out how much you can get versus how much you should get. They can give an honest opinion on what your chances of getting approved are and they can guide you to increasing those odds. With a good agent, you can think of the process as getting the cliff notes of the whole ordeal. You stay informed and you know what’s going on, but you don’t have to dedicate nearly as much of your attention to it.
Mortgage loan underwriting requires many critical pieces of paperwork to assess your credit, your income and if you meet the requirements of the loan program. A mortgage broker manages all of that. They take the burden of delivering those key documents off your shoulders so you don’t have to wake up in a cold sweat at night, wondering if you submitted your bank balance or your grocery list.
The disadvantages of using a mortgage broker
A broker is only human, so, naturally, some are better at their job than others. Finding a broker you can trust is a whole process in and of itself. You should vet their credentials, research reviews and interview them. Failing to take these steps may lead you to a broker that is underqualified. Someone who makes the whole process slower and more obnoxious than it would be without them.
A mortgage broker typically makes a very small percentage (0.5% to 0.7%) of the total loan from the lender, a fee from the customer and sometimes a commission from whatever bank they secure a loan with. What this means for you is that since they get paid per loan and sometimes they get kickbacks, their desires might not always align with yours. This can lead to shoddy work, higher rates and preferential treatment to some lenders regardless of the charge to you.
While it’s true that some lenders will only deal with mortgage brokers and not the general public, the opposite is true as well. Some lenders will not deal with brokers at all, their best terms are achieved through in house underwriting via a Loan officer. So by using a mortgage broker in those situations, you are closing doors that would have been otherwise open.
It’s rarely as cut and dry as yes or no. Using a mortgage broker greatly simplifies the process of getting a loan but at the same time, they come with their own set of challenges. Finding someone who is reliable is incredibly important, and even then you should do some digging on your own.
The bright side is that you’re never locked into a situation with a mortgage broker. It’s not like you sign a contract that ensures any kind of loyalty. If you are dissatisfied with their work then you can hire someone else at any point, or even take a crack at it yourself.
The long and the short is if you want someone else to do the legwork for a mortgage, you want to look into a broker. If you have a low credit score or have some further complications you need help with then definitely consider one. But if you’re comfortable with the whole process? Then it still might be worth tapping that resource, but managing much of the work yourself.