When considering buying a home, most people require a mortgage to do so. Doing business with banks and lenders directly or hiring a mortgage broker. Finding a mortgage broker is a bit more difficult than it used to be but are still part of the mortgage marketplace. In this article, we’ll cover the reasons you should use the best mortgage brokers in California when you’re ready to buy a house.
What is a mortgage broker?
A mortgage broker is a licensed and regulated professional—an intermediary between you and potential lenders to find the lender who meets your exact lending needs. They do all the work for you: organizing documents, verifying employment and credit history, and more. They help you to apply for a mortgage for you with multiple lenders. Once the right loan and lender is agreed upon, the broker will work in partnership with the financial institution’s underwriting department, the title company, and your real estate agent to make the transaction stress- and hassle-free for you through your closing date.
What are the advantages of a mortgage broker?
The greatest advantage of using the best mortgage brokers in Texas is that they shop for the best rate and loan for you. Many times, a buyer will simply accept the first loan quote they are given, not wanting the hassle of having to weed through multiple quotes. A small difference in insurance rate can mean thousands of dollars in savings over the life of a loan—so selecting the best one from many is the best option. Mortgage applications are long and not easy to navigate. Applying for multiple pre-approvals can take up an entire day and the broker will make all those calls and complete that paperwork for you.
Your mortgage broker works for you and not any specific lender, so that makes them much more accessible. When you have questions, you’ll receive direct honest answers without a financial institution’s bias.
Because there are some banks that work exclusively with brokers, your broker has the potential to get certain fees—like the application, appraisal and origination fees waived. It may not be much, but who doesn’t want to save money?
How does the broker get paid?
Mortgage brokers charge a commission for their services, like other individuals in sales professions. A loan origination fee, about 1% of the total loan amount paid by the borrower at closing, is typical. So, if you are borrowing $300,000 then you would pay $3,000 to your broker.
A broker can also negotiate a no-cost loan, so you don’t have to spend extra funds up front. The lender pays the broker after closing in this case. The broker will instead be paid by the lender after the loan closes. The one drawback to this is your interest rate will be a little higher to balance out the transaction.
If you want to go the mortgage broker route, ask for referrals from friend and family, or your real estate agent. Check online service reviews so you find the person who’s right for you. The upfront cost may seem a little steep but is something to consider when making the largest and one of the most stressful purchases of a lifetime.
Golden State Mortgage Can Help
At Golden State Mortgage, we are a California-based mortgage company. We want to help you through every step of financing your new home. Fill out the quick contact form or call Golden State Mortgage today at 1-800-536-8171 to speak with one of our California mortgage specialists and get a free good faith estimate.