So you want to get a mortgage! Without a doubt, buying a property of any sort is most likely to be the most expensive thing you purchase in your lifetime. So, it makes sense that you do your homework and know exactly what you are getting into before you think of applying to lenders for a mortgage, even before saving for the deposit.
Putting your money into real estate, whether you are buying your first home, a buy to let property, or looking to flip a house to make a quick buck involves a lot to understand and think about before you actively start looking for a mortgage.
MORTGAGE READY CHECKLIST
- Can you afford to save for a deposit?
- How much of a deposit can you afford to put down?
- How is your credit history?
- Are you debt-free?
- Do you have a good credit score?
- Can you realistically afford to pay a mortgage on time and consistently until it is paid off?
- Why are you buying the property?
- What is the property for?
- Is this really what you want to do?
Once you have decided you are doing this for the right reasons, the next step is to get your finances in order to help you be in the best possible shape for applying for mortgages.
When you are ready to move forward, it can be hard to determine which mortgage is right for you. This is where a mortgage broker comes in.
ISN’T A MORTGAGE BROKER JUST AN EXTRA FEE TO PAY?
Sure, the services of a mortgage broker don’t come cheap. Of course, you will be required to pay for the service they provide. However, once you fully understand and are aware of the job they perform, you may find the pros outweigh the cons when it comes to finding the right mortgage for you.
Finding a mortgage broker who is on the same page as you and has your best interests at heart can be hard to do. Ask around family and friends for recommendations or search online and check reviews from current or previous clients of mortgage brokers to get the right person for you and an idea of what to expect in terms of fees and timescales.
Since the housing crash of 2008, the practice of mortgage brokers has come under scrutiny. This, of course, raised the question of if they were acting in their own best interests or that of their clients. However, this can be true of many different sectors and isn’t limited to one industry alone.
THE ADVANTAGES OF WORKING WITH A MORTGAGE BROKER
Having a hard time finding the best mortgage deal out there for you? It can be a minefield out there when it comes to finding the best overall mortgage. Some mortgages may appear to be lower in cost and fees up front, but is this true of the whole of your repayment term? Getting an Altrua mortgage means your mortgage broker has found you the best overall deal possible on your mortgage.
Having someone else do the leg work for you can be invaluable, especially if you are short on time to sift through all the information yourself. An experienced mortgage broker means that they know what is out there and where to avoid. Knowledge and experience will give them the best head start when it comes to payment terms, clauses, and restrictions of certain mortgages and mortgage providers.
With this type of experience comes the ability to gain mortgages that might be available via other routes. Many providers rely on mortgage brokers to bring in suitable clients. This means you will be privy to some deals that aren’t advertised elsewhere. Building on this relationship can be so beneficial and will give you a head start over going it alone and trawling through all the different mortgages and lenders out there.
On the subject of knowledge and broker – lender relationships – are you up to date on all the key terms, phrases, and clauses, etc. commonly found in many mortgage agreements? Spending hours going through contracts and the small print can leave you feeling even more confused than when you started. A broker will be familiar with the ins and outs of a great many mortgage terms and conditions. They can explain it to you in a way you can understand so you can be sure you haven’t missed anything or misinterpreted anything.
One more benefit? We have mentioned that taking out a mortgage comes with fees. You will be paying out fees for a myriad of different reasons, not just your broker but arrangement fees, application fees, and appraisal fees. In some cases, your broker may be able to waive some or all of the fees for you. Something you may not be able to take advantage of yourself.
TOP TIPS FOR USING A MORTGAGE BROKER
- Make sure their goal is the same as yours – to find you the best mortgage possible for the best price that works with you.
- Read reviews and do your research to make sure you choose the right person to work with.
- Shop around and don’t rely on the mortgage broker to get the best deals. Sometimes, with a bit searching, the same mortgage could be available to you directly.
- Check if there is a fee payable to the broker from you or from the lender. Know this up front so as not to be surprised when you get the bill once the work is done.
- Check your quote is final and not a ‘good faith estimate.’ Taking on a mortgage with estimated terms could result in the final terms being different, and you have a change in expected payments and other terms.
- Remember: taking out a mortgage isn’t a one size fits all deal. Make sure you are confident in your terms, and you can afford the repayments before submitting paperwork and committing to the mortgage.
PIN THIS POST TO YOUR FAVORITE PINTEREST BOARD.
You may also enjoy:
Need to Hire a Private Jet? Here’s …
Virgin Gorda Vacations – Visit the Beauty That is …
DIY Exfoliating Lavender Soap
Give the Gift of Music ~ #FenderPlay
FAQs
Pros of working with a mortgage broker
So they may be able to find a better deal than you could get for yourself. A mortgage broker can save you time: Brokers do all the research on rates and fees. They negotiate for you, file the paperwork and keep the application process on track.
Why is it good to use a mortgage broker? ›
Not only are you getting an expert who can find a good deal, but you're getting someone who will assess your needs and make a recommendation that is right for you financially. A good broker will also look beyond the best rate and take any applicable fees into account.
Why use a mortgage broker instead of a bank? ›
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.
What is the benefit of using a broker? ›
Contrary to the misconception that using a broker is more expensive, brokers often help clients find cost-effective solutions. Their understanding of the market allows them to negotiate competitive rates and uncover discounts that may not be available to the general public.
Is it better to go through a broker or lender? ›
The financial institution approves or denies your mortgage loan, which is something a broker can't do on their own. If your credit needs work, you're self-employed, you have a tight budget or have many questions about the mortgage process, working with a broker might help the mortgage approval process go more smoothly.
What is the disadvantage of working with a mortgage broker? ›
The Drawbacks: Fees: Brokers earn their living through commissions, which might be passed onto the borrower, either directly or embedded in the loan terms. Not Always Unbiased: While many brokers prioritize client needs, some might push certain products that offer them higher commissions.
Why is it better to go through a broker? ›
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.
Do mortgage brokers charge a fee? ›
Different mortgage brokers make their money in different ways. While some brokers charge customers an upfront fee for their advice and service, other brokers are 'fee-free'.
Why would you need a broker? ›
Brokers ensure all property transactions are legal. They help clients complete all the necessary paperwork and financial details. Moreover, they have experience as agents and can complete all the same tasks, yet brokers generally oversee agents on a team.
Do mortgage brokers get you a better rate? ›
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. If your financial situation is a little unique, don't worry.
It's important to see a mortgage adviser at the start of your mortgage journey whether it's your first mortgage or you're looking to re-mortgage. It will save you a lot of time and effort in the long run. It's a good idea to speak to a few different firms to see what's on offer and to compare fees.
Does a mortgage broker cost money? ›
Getting help from a mortgage broker is usually free for you. They don't charge you directly because they get paid by the banks for bringing them a customer (i.e. you). If you're getting a loan of $500,000 and the broker's commission is 0.5%, the bank will pay them $2,500 for leading you to them.
What are the disadvantages of a broker? ›
The Downside of a Business Broker:
- Cost, my friend, cost: Brokers earn their keep, typically through a commission percentage of the sale price. ...
- Not all Brokers are Created Equal: Do your research! ...
- Not a Magic Wand: Don't expect instant gratification. ...
- Conflicting Interests: Remember, brokers work for a commission.
Many individuals prefer to work with a broker regardless of their situation because it gets them access to lenders they wouldn't think to look for. Mortgage brokers may also be able to help loan seekers qualify for a lower interest rate than most of the commercial loans offer.
Can mortgage brokers get you a bigger mortgage? ›
Unless you have the same level of mortgage knowledge as the broker themselves, a mortgage broker can likely get you a bigger mortgage than you would have got yourself.
How does a broker make money from mortgage? ›
They typically earn a commission of around 1%-2% of the loan value, which the borrower or the lender can pay. When you take out a larger loan, your mortgage broker makes more money. A mortgage broker's total compensation can be paid through various means, including cash or an addition to the loan balance.
Is it good to be a mortgage broker? ›
When it comes to considering being a mortgage broker, job security and opportunities for professional advancement ought to be factored in. A career in mortgage broking offers tremendous potential in both areas. It can also be a very lucrative profession.
What happens when you go to a mortgage broker? ›
But here's the truth: a mortgage broker's sole purpose is to support YOU through the home buying process. Yep, they're the middle person between you and a lender — identifying your needs, comparing loans, explaining your options, chatting to lenders, taking care of the admin — sounding less daunting now?
What is the primary role of a mortgage broker? ›
A mortgage broker's primary responsibility is to educate their clients about different mortgage options and help them choose the best path. However, brokers can serve their clients in the following ways: Support clients with preapproval where possible.
