Searching for the best mortgage rates could be one of the most laborious tasks you’ll ever have to face. Going into the whole process by yourself might cause you a lot of sleepless nights and questionable results. Hiring a mortgage broker can take some weight off of your shoulders making homebuying more joyful. If you’ve never been a homeowner before, this is a huge step in your life, so take all the help you can.
The role of the mortgage brokers is to work with different banks in the interest of the clients, find the best terms and rates, prepare tons of paperwork, and lead the closing process. As you can see, there’s a lot of various factors involved before you can ink the contract.
For first-time home buyers, this is the uncharted territory, thus finding an experienced broker like Clover Mortgage, who can offer the type of mortgage that best fits your budget can make all the difference in the future.
Find the right broker
It’s a long process from finding the right home to signing the documents at closing. There are a lot of hurdles and unexpected challenges that an experienced broker will sail through with ease. Do your part by researching and interviewing various mortgage brokers to find the right fit for you. It’s critical to find a person that communicates well and is available to answer all your questions no matter how insignificant they seem. Check out his or her references, ask about the lenders they work with, inquire about an experience, and the process ahead of you.
A word of caution: some brokers tend to work with a selected number of lenders, thus not doing their due diligence in finding the most affordable loan. For them, it’s a quick and familiar process that they want to be over with. If you sense that your broker is dismissing your questions, or you’re not satisfied for any reason, move on and find a different company that will appreciate your business.
Evaluate Your Current Financial Situation
Mortgage brokers can take a look at your current financial situation and determine what the odds are of being approved for financing. That means taking a look at your credit reports and scores, confirming information about your income level, and assessing any secured and unsecured debt that you already have in place. The goal is to ensure that you meet the minimum qualifications that most lenders set for applicants. That includes lenders who may offer financing to those with less than perfect credit.
Steer away from the properties you can’t realistically afford and be honest with the mortgage broker about monthly expenses. By doing this, you’ll spare yourself a lot of headaches down the road.
Make Suggestions for Becoming More Attractive to Potential Lenders
There may be some things about your present situation that could be improved and make you more attractive to lenders. Perhaps waiting a few months before applying and using the time to pay down debt would be helpful. That may also help boost your credit scores a little; doing so could be just the boost you need to receive financing with a slightly better interest rate.
You’re under no obligation to take those suggestions. In most cases, doing so will make it possible to obtain better mortgage terms and conditions. If you can wait, it’s possible to save quite a bit of money and still get the type of home that you want.
Ensure Your Application is in Order
One of the more common issues that leads to rejections is applications that have some sort of error or omission. With many lenders, all it takes is one problem, and the evaluation process stops immediately. You’re always free to submit a corrected application, but that could mean a rejection if some other problem is found.
One of the ways that a broker can help you is making sure there’s nothing omitted or questionable on the application. That may mean spending some time adding more detail or changing the wording on some answers to the intent is clearer. Rest assured the effort will pay off when you’re able to receive an offer that you can manage.
Pair You with the Right Lenders
Brokers often have ways to find better rates for your mortgage since they do work with various lenders. Based on past experience, it’s possible to identify the lender who is most likely to approve the application and extend terms that you can manage for the long term. In some cases, it may be a lender who is not known nationally but has a strong track record with helping people like yourself achieve the goal of owning a home.
If you think that the time is approaching to buy a home, talk with a broker today. Be prepared to provide information that confirms your identity, income sources, and current debts. From there, the broker will work with you to come up with a solution that is in the best interests of everyone involved.
Broker’s fees
Most mortgage brokers earn commissions from the lenders, or they can charge fees to the borrowers i.e. the homebuyers.
- Borrowers fees – Homebuyers stand to pay 1-2% of the loan amount to the broker. These costs are usually paid at the closing or are included in the loan fees.
- Lender commissions – Lenders sometimes pay broker’s fees that range from 1-3%. However, this is a trick that banks have been using for a long time. Lenders pass these costs to homebuyers presenting them as the cost of the loan incorporating them into the mountain of fees.
As you can see, mortgage broker’s fees will be paid by the buyers at the end. This is just business as usual, but you need to be fully aware of how much exactly you will be paying. For example, if you’re buying a $300,000 home, broker’s fees would come up to $6000 for homeowners to pay. Therefore, carefully factoring in all the costs involved in buying a property can influence your budget to a certain extent.
