Benefits Of Using A Mortgage Broker (2024)

FAQs

Benefits Of Using A Mortgage Broker? ›

Working with a mortgage broker can potentially save you time, effort, and money. A mortgage broker may have better and more access to lenders than you have. However, a broker's interests may not be aligned with your own. You may get a better deal on a loan by dealing directly with lenders.

In addition to giving you mortgage advice, they can typically advise on what insurance products will be best for you, as well as helping with the subsequent applications. It's another service they can provide to make your life much easier.

So, is a Mortgage Broker Really Worth It? While brokers can save you time and potentially secure better mortgage rates, they typically charge a fee for their services. However, the expertise and potential savings they offer can far outweigh these costs.

The first thing a broker will do is meet you and get a better understanding of what it is you want. Brokers are, after all, your finance professionals, so the better they get to know you, your financial circ*mstances and long-term goals, the better they can match you with a product that is right for you.

A mortgage broker can offer a wider array of options and streamline the mortgage process, but working directly with a bank gives you more control and costs less. Kate Wood is a mortgages and student loans writer and spokesperson who joined NerdWallet in 2019.

A broker can shop around and compare various mortgage products and rates offered by different lenders, allowing you to find the best deal for your financial situation. This means you don't have to spend hours researching lenders and filling out applications.

Individuals who are less qualified buyers or are buying less traditional properties will have an easier time finding loans for which they can be approved by going through a mortgage broker than by going through individual direct lenders with generally stricter criteria for approval.

Fixed fees typically cover the broker's services, from lender research to finding and securing products that suit your needs and circ*mstances best. However, some mortgage brokers might charge additional fees for complex cases or if you require extra services.

Your broker can help you understand where you'll be financially once you sell your current place, provide you with suburb and property reports to see what you can afford, and help you work out what you can afford to borrow.

Make sure you ask your mortgage lender – or broker – plenty of questions about income requirements, the types of loans you qualify for and how much you have to save for a down payment and closing costs. Do you have questions or need help finding the right loan for you?

Why do people use a mortgage broker? ›

Mortgage brokers can save borrowers time and effort by finding a variety of potential lenders for them. They can help borrowers avoid lenders who may not meet their needs or even be unscrupulous.

Working with a mortgage broker can potentially save you time, effort, and money. A mortgage broker may have better and more access to lenders than you have. However, a broker's interests may not be aligned with your own. You may get a better deal on a loan by dealing directly with lenders.

Do you need a broker? The short answer is no—you don't need a living, advice-giving, fee-charging broker (although you shouldn't rule them out). You do, however, need a brokerage—the online storefront where you purchase stocks, bonds, exchange-traded funds (ETFs), and other investments.

Using a mortgage broker can speed up and remove some of the stress involved in the house-buying process. As mortgage brokers have access to special deals, they may also be able to get you a cheaper mortgage than you can find yourself. Some will even tell you about better mortgages you can only get direct.

In fact, good mortgage brokers will receive volume discounts from major lenders. That helps them secure a mortgage rate for you that is lower than what you'd be able to negotiate yourself, even from the same big bank.

They Can Make the Application Process Faster – given that mortgage brokers have good relationships with the lenders they work for, they can actually speed up your application, making it two to three days faster than usual.

So, if you are self-employed, have a poor credit history, or are considered a high-risk borrower, your application may be rejected. However, with a broker on your side, you have a better chance of getting approved for a mortgage.

What does a mortgage broker do? Mortgage brokers arrange home loans between lenders, and borrowers – people who are looking for a home loan. They can discuss your home loan needs and goals, find home loan options to suit your situation and assist you with the application process.

Mortgage brokers often work closely with lenders, so they may have access to insider knowledge, deals and rates the average home buyer doesn't. Mortgage brokers also often have strong negotiating power and may help you get a lower interest rate on your mortgage because the banks want their business.

A mortgage broker is offered loans on a wholesale basis from lenders, and therefore can offer the best rates available in the market, typically making the total loan cost lower for the client. A reputable mortgage broker will disclose how they are paid for their services, as well as detail the total costs for the loan.