A mortgage broker works for you. While banks and credit unions are eager to open their coffers and make money, brokers put your best interest first. These professionals may not charge you as much as you might think, but the fees can add up over time. It’s worth the extra money for an experienced mortgage broker in North Fremantle. Read on to find out why you should use a mortgage broker to secure your mortgage.
10 reasons to use a mortgage broker
When buying or renewing a mortgage, many borrowers first try to secure financing through their local bank. Banks tend to offer better rates and terms because of their longstanding relationship with clients. Additionally, they often offer discounts because they already know their clients. A broker has access to a wider selection of loan options than a traditional bank does, making it easier for them to secure the best rates and mortgage options for borrowers. A broker has partnerships with over 50 lending institutions, making him or her your best option.
Moreover, mortgage brokers can help clients with income and credit issues. In some cases, a mortgage broker can resolve such problems before the client even applies for a mortgage. The process of mortgage financing is extremely complex and confusing. This is where a mortgage broker can come in handy. It is not enough to fill out an application and get approved for a mortgage on your own; a broker can help you navigate the process from start to finish.
Fees charged by lenders
Lenders may charge borrowers or charge commissions for using the services of mortgage brokers. Although federal law prohibits both parties from paying brokers, it is common for lenders to charge borrowers a commission. Lenders recoup their fees by raising interest rates. The fees paid to mortgage brokers vary by industry. In general, they charge one to three percent of the loan amount. The borrower can pay the commission up-front or have it rolled into the loan.
Some lenders may charge borrowers a loan origination fee or loan processing fee. The underwriter has the final say about approving a loan and is responsible for assessing the financial risk involved. Underwriting fees typically cover the cost of flood certification, commitment, wire transfer, and tax service fees. However, some lenders do not charge this fee, so it is important to know what you’re getting into before hiring a mortgage broker.
Cost of using a mortgage broker
The cost of using a mortgage broker varies depending on the type of broker you choose. Brokers usually receive an upfront commission from the lender, which makes them more biased to certain lenders. Mortgage brokers also may receive ongoing payments after the mortgage has been funded. These “trailer payments” can reduce the upfront commission and provide a more stable income. There are some disadvantages to using a mortgage broker. Consider the following situation:
To avoid paying for unnecessary services, shop around and compare broker fees. Check their industry experience and credentials. Look for a licensed broker with a solid reputation. Also, ask for references. Finally, use a checklist of questions before making your decision. By following this checklist, you can be confident in choosing the right mortgage broker for your needs. However, be prepared for the unexpected – not all brokers are equal. You may want to get a mortgage broker who is more flexible.