Mortgage brokers are here to help and serve you. They act as an intermediary between you and lenders, to ensure that you get the best mortgage rate possible. They are qualified experts who can assist you in choosing the best mortgage option to meet your financial situation and objectives.
Mortgage brokers make their money as a commission from your transaction. What this means is they’re in the service industry. They are literally there to serve you.
Are there downsides to mortgage brokers? There can be (more on this later), but the positives far outweigh the negatives.
Will a mortgage broker help?
The short answer is yes. Using a mortgage broker can simplify the mortgage process, giving you access to a wider range of products, and helping you find the right mortgage for you.
One of the biggest reasons to consider a mortgage broker is the wide range of mortgage products they offer from a variety of lenders. This means that they aren’t limited like a bank is, which can only sell you one set of products.
Mortgage brokers also tend to bring expert advice to the situation and they can guide you through the loan process. Banks can do this too, but remember that they are biased towards just selling you their own products and won’t give you the same breadth of advice.
Another consideration is that mortgage brokers bring established relationships to the table. This can empower them to negotiate better interest rates for you and better loan terms. This can be extremely valuable when you consider the lifetime of your loan and the total savings you stand to make.
Alongside money, mortgage brokers can also save you time. Applying for a mortgage can be a labor-intensive process that will require your attention for a number of weeks. Mortgage brokers take care of the complexities like gathering documents, submitting your loan application, and following up with your lender throughout the process.
Why you shouldn’t use a mortgage broker
There aren’t too many reasons why you shouldn’t use a mortgage broker. They exist to help you find a better mortgage than you would alone. That said, you shouldn’t just pick any mortgage broker. Some are better than others.
The first thing to consider is if they will be able to help you get down payment assistance. There are hundreds of down payment assistance programs across the country, with programs starting and ending regularly. A good mortgage broker can help you identify which assistance programs you qualify for before you start shopping for loans.
The second thing to consider is the level of attention you receive. It’s important to find a broker who understands your situation and wants to help you. Today’s market has brokers up to their ears in new loan applications, which can minimize the personal touch.
Try to pick a broker that is responsive, communicative, and available to you. If you try a broker and they turn out to be less available than you need, find someone else. Choosing a loan isn’t a decision to go into without support.
Make sure your mortgage broker knows your situation
Coy is not the game to play when meeting with a mortgage broker. There is one goal: figure out how much house you can afford and which bank will give you the money at the best rate.
Don’t be surprised when it’s 5 minutes in and they’re already asking you for your social security (they need it) and your annual income (it’s required). They have to run a soft credit inquiry to verify your information. Now before you get anxious, this won’t impact your credit score that you’ve worked so hard on. It’s just a peek, not a full-fledged look. Also, they do this all day long, so don’t feel like they’re going to sit back and judge you.
The average mortgage broker makes around $85k a year (location dependent) so it’s not like they’re necessarily doing much better than you. They may be the gatekeeper to you and that money, but they’re willing to open the door, you just have to provide the right keys.
What it’s like to meet with a mortgage broker
Mortgage brokers work in a typical office at a bank. For an initial pre-approval, this conversation can happen either in-person, virtually, or exclusively through email depending on your broker. It’s incredibly convenient to start the process based on whatever your needs or wants are. If you feel better talking with someone face-to-face, great! That’s an option. If you’re limited on time and don’t care to meet the person at the end of the email chain, also great! Make this process work for you, not the other way around.
At the end of your meetings, you’ll either walk away with increased knowledge of your readiness for home ownership, or you could be the proud parent of a brand new baby mortgage. Whichever option is yours, feel confident in knowing that a mortgage broker is on your side, every step of the way.
Remember, they want to get you to work with them; that’s how they make money. So it’s in everyone’s best interest that they are obliging and kind, after all, this is a substantial life decision you’re about to make. You should go into it feeling at ease. You are not on a conveyor belt being inspected and potentially cast aside if you don’t fit the proper criteria.
Not all mortgage brokers know about down payment assistance
When choosing your mortgage broker, keep down payment assistance in mind. There are hundreds of programs across the country that exist to help you buy your first home sooner. Unfortunately, most mortgage brokers don’t know about all of them.
Before you visit a mortgage broker, check in with us at Stairs. We offer the largest database of down payment assistance programs online. Some programs can take as much as $100,000 off your mortgage (if you qualify).