Although many reports state that home sales are slowing, things are actually picking up for first-time homebuyers. Now, more than half of all new mortgages go to first-time buyers.
Buying your first home can be incredibly exciting: you can finally customize your own beautiful living space! But it may also leave you with a lot of questions. Many of those questions have to do with money — how can you get the home you want without breaking the bank? One of the keys is to work with a mortgage broker.
What is a mortgage broker, and what can one do for you? I’ve got the answers for you in this guide. Keep reading to find out why you need a mortgage broker for your first (and any) home purchase!
What is a Mortgage Broker?
Mortgage brokers essentially act as the go-between for you and the mortgage lender. These licensed professionals have the financial know-how that you don’t, so they can help work things out so that all parties are happy with the outcome.
For example, a mortgage broker can help you find more lenders who will meet your needs, so you can find the best possible rates for your home loan. They’ll help you navigate the complexities of getting a mortgage, so you don’t run into any trouble with the lender.
Although your mortgage broker is a “middleman,” they aren’t one that you can cut out to save money. In fact, working with one typically translates into more savings for you. They work with your best interests in mind, while also keeping the needs of the lenders in mind too.
They earn money by earning commissions from the loans they help secure. Although this adds a bit more money to the costs of buying a home, you’ll usually make up for it by saving money on the loan you get.
Why You Need a Mortgage Broker
Although you can probably already see why working with a loan broker is helpful, let’s take a closer look at the ways they can help you.
1. Saves You Time
Buying a home is a time-consuming process. You’ll need to add many new responsibilities to your daily schedule, while still managing work and other responsibilities. Anything that saves you time is a bonus.
Of course, you could do the work to research and compare lenders by yourself. However, that takes more time than many homebuyers realistically can spare.
Mortgage brokers don’t just research lenders so you can target the best ones that fit your needs. They also fill out the paperwork for you, so all you need to do is sign. If any negotiations with the lender are needed, your loan broker will handle those, too.
Most of these loan brokers work with certain banks, so they already have working relationships with lenders that will speed the whole process along. You’ll get your loan faster, while also saving your own precious time.
2. Accesses More Loan Options
Some lenders actually work solely with brokers. This means there are home loan options that will never be available to you unless you’re working with a broker. Sometimes, these “hidden” options are much better than what you can find on your own.
3. You Can Leave at Any Time
Although working with a mortgage broker generally goes well, if you run into any problems along the way, you’re not locked into an agreement. You can leave at any time and find a new broker or decide to take another approach to finding your loan.
This freedom is just enough to help some people feel confident as they start working with a broker. You won’t sign any contracts so there’s nothing to lose.
4. Gets You Better Rates
You can sometimes get preferential rates by working with a loan broker to get your mortgage. The broker can help you learn how to get better rates in ways you might not be aware of. For example, certain banks will give you a better rate if you also have a separate account, like a savings account, with them.
5. Gives You Personalized Feedback
In the process of buying a home, many things might feel like navigating the deep woods without a compass. A loan broker offers personalized feedback and guidance that you can’t get anywhere else.
For example, you might wonder if a 30-year loan is best for you, or if a fixed interest rate is the way to go. Your mortgage broker will help you answer these questions and many more.
The loan that’s great for one buyer might be completely wrong for another buyer. It all depends on unique factors, such as your credit score and income. Brokers have the knowledge needed to help you find a loan that fits your particular situation well.
They’ll also help homebuyers with unusual situations navigate the challenges of getting a loan. For example, if you’re a small business owner, or just changed jobs, your broker will help you get a loan even though these look like red flags to many lenders.
Brokers can even help people with bad credit find lenders who will work with them. From the unusual to the typical, a broker makes navigating these challenges of homebuying much easier.
How to Find a Great Mortgage Broker
Most mortgage brokers operate under their own name. When you Google “mortgage brokers near me,” you’ll find names from Hunter Galloway to Mike the Money Man. But how can you tell whether or not they’re the right broker for you?
Your best bet is to look for referrals. Ask your network who they recommend. If you find someone online who sounds like a good fit, ask them to share customer testimonials with you.
Real estate agents can also be great sources of referrals. If you already have an agent, ask them which mortgage brokers they recommend.
Ready to Buy Your Own Home?
Whether it’s your first, second, or tenth home, working with a mortgage broker makes everything easier. Don’t let the challenges of homebuying slow you down: find a professional who can help smooth out the process.
Once you have your broker, you can start planning ahead for all the cool things you’ll do with your new home. Don’t miss our guide to making your house a “smart home” here!