According to a report made by NMLS, the year 2017 saw an increase in the number of state-licensed mortgage companies by 3.8 percent. Mortgage loan originators also increased by 8.9 percent.
Throughout the years, the mortgage industry has gone through several changes to become one of the largest and complex home financing markets. Mortgage brokers are at the front of this curve, driving the changes.
But who is a mortgage broker and what does one do?
Who is a Mortgage Broker?
A broker acts as the liaison between the bank and the homeowner to help the homeowner get a mortgage, or a mortgage refinance.
Instead of a homeowner dealing directly with a mortgage lender, the broker facilitates all the activities without the three having to meet. When shopping for a good loan deal, you need to find a program that meets your financial needs and lifestyle.
A good deal means that it should allow you to save up on interest as time progresses. However, the legwork can result in frustrations and time wastage. Due to this, you may find it easy to get the services of a loan broker.
A broker may help you expedite the process to secure a suitable lender that will help you with the purchase of your home.
However, before getting the services of a broker, you need to ask yourself these critical questions.
What is your Financial position?
Do you have a good relationship with your bank? How about your credit score? How much liquid assets do you have?
If you are in an excellent financial position, or you have a good credit score rating, you can get access to home loans with reasonable terms and better services. Therefore, you may not require to get the services of a home loan broker.
You can still look around to see the various offers mortgage brokers are offering and compare with what the banks are offering.
Do the Interests of the Home Loan Broker Align with Yours?
The 2008 market crash caused an uproar in the mortgage industry with many brokers getting their clients mortgages that they could hardly afford.
A broker has to find mortgages that have a low-interest fee and at an affordable cost. However, a broker may get compensation from the lender. The charge arises from the amount of loan that is issued.
If a broker has ill intentions, they may get you a loan that only maximizes their earnings.
Is it your Home-buying Experience?
If you are getting a mortgage for the first time, you may need the help of a professional to show you the ropes and make work easier for you. A home loan broker has more knowledge and access to different lenders in the mortgage industry.
By using a home loan broker, you can reduce the time you would waste filling the long mortgage application papers in a bank. They can also help you secure some fee waivers from the lender such as the application, origination, and appraisal fees.
Making Your Decision
Although there are some risks to getting the services of a mortgage broker, they can be of real help when you are looking to purchase a home. However, before you decide on using one, you need to shop around and see if you can find a good enough rate.
If your only option is a broker, ensure that you do your homework before hiring one. Only get a broker with credibility and who can offer a guarantee of commitment to your needs.
Visit our blog to get more information on how to secure a mortgage.