4 Facts Regarding Mortgage Brokers And Lending Companies

If you are considering buying your own home, you may be looking for a real estate agent, but you should also consider hiring a mortgage broker. A mortgage broker helps you find the right loan and lender to pay for your new home. To see if a mortgage broker is a good choice for you, check out these four facts about brokers and lending companies.

They Have Your Best Interests at Heart

Usually, when you buy a home, you need to take out a loan or mortgage on the home. You can go to most lenders yourself and speak with them directly regarding home loans. In fact, they have loan officers who specialize in home loans, auto loans, personal loans, etc. The loan officer works for the bank, however, so they have less flexibility to negotiate for a lower interest rate.

A mortgage broker doesn't work for the lender, so they aren't doing what's best for the bank. They do what's best for you to find you the ideal loan for your needs. You'll need to provide your personal information and credit history, but they are financial professionals trained at handling confidential information.  

They Do the Legwork for You

The most important thing a mortgage broker does for you is finding you a loan. On the surface, this may seem easy, but it takes a lot of time. There are so many banks even online banks, and they all want your business. With so many prospects, it's difficult to find a loan with the right interest rate, for the right amount, with special perks, without fees, etc. This way, when you tell them your needs and wants, they can already narrow down the list of potential lenders.

If you attempt to find the loan on your own, you'll likely have to meet with a lot of banks and other lenders if you want to find the best deal. Once a loan has been accepted, the mortgage broker handles all the paperwork and calls for you, so all you have to do is sign and move in to your new home.

There Is a Fee

The advantage of using a loan officer from a lender is you don't have to pay them. Because they work for the bank, the bank pays them. A mortgage broker, however, also needs to get paid. In some cases, you as the borrower are responsible for the fee, but in other cases, the lender pays it.

The broker, however, cannot get paid from you and the lender, and they cannot get paid for guiding you to a particular lender/high-interest loan just to get a bonus or more money. The mortgage broker's fee is a small portion of the total loan amount. It's usually about one to two percent. Typically, this amount is paid by you as the borrower.

Lenders Prefer Brokers

While you can get a home loan on your own, lenders usually prefer to work with mortgage brokers. In fact, some lenders refuse to work with anyone but mortgage lenders. This is because mortgage brokers use the same language and work in the same field as the loan officer and lender, so the entire process is smoother for both sides.

This doesn't just benefit the lender; it benefits you too. If a bank isn't excited about talking with you, and if you don't have the familiarity with the loan officer a mortgage broker may have, you are less likely to get a good deal. A mortgage broker, especially one who knows the lender well, is more likely to get you a low interest rate.

Buying a home is exciting, but finding the right loan can be stressful. Instead of trying to negotiate your own terms and find a lender who meets your needs, hire a mortgage broker to work with the lender on your behalf, getting you a better loan. For more information about mortgage loans, or if you have a lender you already like, consider calling a mortgage broker at companies like Attorneys Funding Group, Inc in your area.