When it comes to buying a home, the part that people look forward to the least is having to figure everything out with their mortgage. While finding your dream home is fun, the administrative part is enough to drive even the most sane people mad. However, if you work with the right people, this whole process can be much simplified for you. So to help you get to this point, here are three tips for working with a mortgage broker on a home purchase and why choosing to go this route could be beneficial to you.
How Mortgage Brokers and Loan Officers Differ
In the world of home mortgages, there are two people you might find yourself working with: a loan officer or a mortgage broker. While you might think it easier to just pick a loan officer at whatever bank or credit union you currently work with, David Weliver, a contributor to MoneyUnder30.com, shares that using a mortgage broker might actually be a better choice for you. Instead of having to work with just a few lenders within their institution like loan officers do, mortgage brokers can take your application to all types of lenders until they’re able to find the perfect fit for you. By helping you shop around, a mortgage broker might be able to help you get a much better deal on your mortgage loan.
Understand How Mortgage Brokers Get Paid
Because many mortgage brokers work as “free agents”, you might be wondering how they get paid and how that will affect you working with them. This is where you’re going to want to do a little more research on your own before you pick a specific mortgage broker to work with. According to Deborah Kearns, a contributor to NerdWallet, some mortgage brokers will be paid by the lender after the loan closes, allowing you to use them at no cost. However, this cost can be passed onto you in the form of a higher interest rate. Typically, however, you’ll be charged about one percent of the loan amount that will then be due at closing.
Find Someone With Experience
When picking the exact mortgage broker that you’ll be working with while purchasing your new home, it’s going to be a good idea for you to choose to work with someone who has quite a bit of experience in this area, especially if you don’t. According to Linda Fiorella, a contributor to Forbes.com, mortgage brokers with a lot of experience will be able to understand even the parts of your mortgage that are complicated and confuse you. Additionally, they’ll have a wealth of knowledge about which options are going to be best for you and how to proceed forward with the mortgage loan that you want.
If you’re considering working with a mortgage broker when buying your new home, use the tips mentioned above to help you have the most success.