Working with a direct lender like a bank may seem like the thing to do—but an independent third party can offer impartial advice. A mortgage broker has access to a much wider array of products; a mortgage broker’s services can help you make sound financial decisions.
Still not convinced? Take a look at these 10 great reasons to use a mortgage broker.
- Like many other professional services such as insurance, mortgage brokers are generally paid a finder’s fee, or commission, when they introduce trustworthy, dependable customers to a financial institution. These fees help ensure the focus remains on you, the customer. It’s in their best interest to get you the best rate possible, or they don’t get paid.
- Mortgage brokers have an exceptionally large network of lenders that they work with—and can get you the most favorable mortgage rates and terms. Look at it this way: the more lenders you have competing for your home loan, the more you save. In addition to traditional lenders, they also know what’s being offered by credit unions, trust companies, and other sources.
- As independent mortgage brokers and mortgage agents, they’re not tied to any one lender or range of products. The goal is to help you successfully finance your home or property. They will start by getting to know you and your home ownership plan, then they will make a recommendation, drawing from available mortgage products that match your needs—and work together with you to determine what’s right for you.
- Mortgage brokers are also able to negotiate lower interest rates from lenders in exchange for bringing in business. Many people are uncertain or uncomfortable negotiating mortgages directly with their bank; brokers negotiate mortgages each and every day on behalf of potential home buyers. You can count on their market knowledge to secure competitive rates and terms that benefit you. They can oftentimes find a lender who accepts home loans that the bank declines.
- Mortgage brokers save you the groundwork of finding the best mortgage rate and terms for your specific needs. They can also help you take care of other requirements before your closing date, such as sourcing mortgage default insurance if your down payment is less than 20% of the purchase price.
- Banks provide all types of loans, yet may not have the specialization in home loans that a mortgage broker has. Banks do not have a network of lenders that they work with; every home loan application the bank receives is from one lending institution. This means your loan is one of hundreds and not of any special significance of the bank. Loan officers process mortgage loans originated only by their employer, so they really only have the bank’s interests in mind—not always yours.
- Many financial institutions compete for clients, which is why they often offer incentives to lure creditworthy customers. These can include retail points programs, discounts on appliances, shopping clubs, and more. Brokers do the math on which financing and mortgage insurance offers might be worth your attention so you get the perks you deserve.
- As employees of one specific bank, loan officers are often limited to certain home loan products, guiding principles and criteria that they must follow. This typically limits the quantity of available home loans.
- Whether or not you choose to get your home loan through that particular loan officer, they are still getting paid a salary; they have no particular incentive to look out for your best interests.
- Even if you’ve already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping. A broker can investigate alternatives that might better suit your needs.
Look to a mortgage professional to help you comparison shop if you are ready to purchase your dream home. Search online for mortgage brokers in your local area. A mortgage broker can save you a lot of time and phone calls by doing the shopping for you, to help you find the lowest rates and fees for your home mortgage needs. Getting a home loan customized to your needs is one step of the home buying process that you will not have to be concerned about.
Golden State Mortgage Can Help
At Golden State Mortgage, we are a California based mortgage company, and specialize in FHA home loans for first time home buyers. FHA loans are a great option for first time home buyers—if this is your first home purchase, a California FHA home loan is probably your best option due to the low down payment and easier credit standards. Your down payment can be as low as 3.5% of the purchase price, and closing costs and fees can be covered by the seller. Call Golden State Mortgage today at 1-888-502-2136 or fill out the quick contact form to speak with a California FHA loan consultant and get a free good faith estimate.