Congratulations! Finally you’re looking for the home of your dreams. It seems like you’ve narrowed down the best available homes options for your family and now need someone to help with the finance part. Since it’s hard to have enough cash to buy home, a mortgage broker can shepherd you through the intricate lending process from start to finish.
Since you are new to the home-buying process, it’s quite easy for you to get confused about the functioning of a mortgage broker Vancouver. A mortgage broker is someone who acts as a middleman between you and the potential lenders and represents yourself to the lender to get the best deals on available mortgage options. But this is not all about the mortgage brokers.
Here in this article, I’ve compiled the top facts that may be helpful for you to know about the mortgage brokers.
Who Are the Mortgage Brokers?
In simple language, a mortgage broker serves as a middleman between the homebuyers and the potential lenders. They find the best lenders for you, complete the required paperwork, negotiate with bank over interest rates and close the deal on your behalf. In most cases, people misunderstand the mortgage brokers with loan officers but they aren’t the same.
Mortgage brokers are licensed and certified with local authorities to work as brokers. They do the technical work on your behalf so you get the best deals.
What They Get Paid?
Similar to the real estate brokers who help you find best property options and get best deals on the selected ones, the mortgage brokers also get paid on commission. They won’t charge any hourly or a designated fee for consultation, but they charge only 1% of the loan amount. But there are also the mortgage brokers who work on no-fee mortgage for you. This means you don’t pay them anything for the consultation and negotiation, but the bank would.
While dealing with the no-fee brokers may seem a lucrative deal initially, but you may end up paying higher interest charges for the mortgage as they won’t negotiate for you with the bank. These mortgage brokers deal with many lenders and earn via commission charges. The larger the loan amount, the higher will be the broker’s commission.
What are the Benefits of a Mortgage Broker?
For the new homebuyers, dealing with the banks and relevant paperwork can be a great deal. A home buyer mortgage broker serves as a great support to save you from the paperwork and everything else that would turn out to be a hectic process and technical enough you won’t even understand unless you’re an expert. The broker would apply for loans with different lenders on your behalf, negotiates terms and interest rates and makes the approval magic happen.
Another great reason of choosing between the mortgage broker vs bank is you save a lot of time with a mortgage broker. They save you from the hassle of managing all those daunting details.
Are There Drawbacks?
The only drawback of working with a home buyer mortgage broker is that you pay 1% of the total loan amount as commission. However, this poses as a drawback only if you overlook the loss you’d have to bear by paying the higher interest rates if you choose to work with a no-free broker.
If you’re thinking of doing it yourself, then be prepared to handle the stress and put a lot of efforts on looking for the best mortgage deals. Keep in mind that it takes a lot of efforts and since the mortgage brokers are experts at it, they can do it fast. Besides the brokerage fee, there’s not much downside of working with a mortgage broker.
Referrals Are The Best to Find One!
Similar to looking for the best deals on home mortgage options, looking for the best down payment mortgage brokers is also important. And the best way to find a trusted one is using your personal or professional network. Get references from friends, family or colleagues regarding the best mortgage brokers they have worked with and check how better deal they got.
See how have been their experienced with the particular mortgage broker and know about the level of broker’s service and communication style. A professional, expert mortgage broker can be a great resource when it comes to picking the best deals on home mortgage. Interview the best ones before you make a decision.
If you are expert at handling paperwork and can negotiate over the interest rates on mortgage with potential lenders, then it doesn’t make sense in dealing with a mortgage broker. But, if you’re just like other home buyers with no information that you can even negotiate over the mortgage interest rates, then it’s good to have someone by your side for assistance. While hiring a broker, make sure to be clear of asking everything you have in mind. And mark my words, they’re very good at communication and manipulating people, so use your senses and intelligence to hire the best mortgage broker.