Many first-time homebuyers make a mistake by trying to negotiate a mortgage directly with a lender. Unless you are an expert in home loans, it makes much more sense to hire a mortgage broker to do the negotiating for you. A mortgage broker can provide prospective homeowners with a wider range of options, increased flexibility and lower costs than any single lender can.
Choose Between Several Lenders
Perhaps the greatest benefit of hiring a mortgage lender is that you will have many more options from which to choose than you would have with a single lender. Most lenders have a very limited product range when it comes to home loans, but a mortgage broker can negotiate on your behalf with several lenders simultaneously. However, you should confirm exactly how many lenders the broker will contact because some only work with a select few.
Flexible Closing Process
Lenders are known for having a strict closing process, and a homebuyer dealing directly with a lender may become locked into a system beyond his or her control. A mortgage broker gives you more flexibility over your mortgage closing. In addition, many brokers are prepared to work with you on credit issues or problems with the paperwork. Finally, lenders are often unwilling to budge on a decision to deny home loans, even with long time customers who have decent credit.
Low Interest Rates and Fees
One of the reasons many first-time homebuyers decide to work directly with a lender is that they believe they will get better interest rates and incur lower fees than with a broker. After all, don’t mortgage brokers just tack on extra fees and raise interest rates to make a profit? The fact of the matter is that most mortgage brokers work through special programs with lenders that are not offered to the public. These programs allow the brokers to make a profit from lenders instead of from their clients. In many cases, the total price of your home over the term of the mortgage will be less than what it would be when negotiating directly with a lender.
Most mortgage brokers offer several additional services other than providing home loans. Some first-time homebuyers discover that their credit is not yet suitable for buying a home, and a mortgage broker may be able to offer advice and strategies for improvement. In addition, a mortgage broker is always available to provide you with support throughout the mortgage process, which decreases anxiety during what can be a stressful experience. Finally a mortgage broker may show you tools such as an interest calculator which will help you budget and see your loan repayments.