When to Hire a Mortgage Broker
Let’s say you’re doing your own mortgage research – you’ve already spoken to a financial planner and are ready to take the next step in the home buying process. John wants to know:
I am planning to buy something later this summer / fall and am trying to get my affairs and down payment in order. I spoke with a financial planner through my Employee Assistance Program (EAP) on several issues and talked about the pre-approval process. A few months ago, I contacted my bank to find out what I would get prior authorization for. In a conversation with a financial planner and some friends, they mentioned that I should find at least one other traditional bank and two mortgage companies / brokers.
Any advice on what I should look for in a mortgage broker? Does it matter if the company is national, regional or local?
If you’re looking for a home, hiring a mortgage broker can help you compare rates and find a great deal. But is it really necessary?
Here’s what you need to know. A mortgage broker is essentially an intermediary between you and the lenders. He or she works to find you a lender who can offer you the best rates. “Mortgage brokers can save you the hassle of figuring out all your loan options, and they probably have a network of lenders to help you get multiple bids on time,” said Jason Bateman, head of Redfin Mortgage . These same lenders may not work with individuals on their own.
But experts are ambivalent about whether you need to hire him.
On the one hand, “working with a mortgage broker does not guarantee that you will get the best deal, and they do not guarantee their ratings,” says Bateman. “Oftentimes, doing the work yourself produces the same result without having to pay a fee.”
Meanwhile, Matt Ishbia, President and CEO of United Wholesale Mortgage, notes that while buying a home is one of the most important financial decisions we make, people usually don’t have a lot of experience before having to spend money on it. trigger. Brokers can help and can recoup the commission, which is usually one percent of the loan amount, and can help you save on some other home buying fees, such as application fees or appraisal fees.
“You can’t get a mortgage on your own, it’s not like buying a plane ticket,” Ishbia says.
However, you will want to do a little research before meeting with a broker. It never hurts to get some more quotes. Use an online mortgage calculator to get an idea of the rates and get some offers from lenders yourself. “Seek advice from friends and family as well,” says Erin Lanz, vice president and general manager of mortgages at Trulia. “A mortgage broker is someone you want to trust and feel comfortable with, just like a real estate agent.” When looking for a broker, it is best to use local ones because they know the market and all your options well.
Here you can find a local broker and compare loan offers from different sources on sites like Trulia Mortgages .