Using a mortgage broker

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Using a mortgage broker
There are many advantages to using a mortgage broker versus going to your local bank in order to obtain a mortgage for a home purchase or to refinance your home. One advantage of using a mortgage broker is the fact that a mortgage broker can shop your loan around through tens, hundreds and sometimes even thousands of lenders in order to find the right lender to fit your specific needs. Whereas your local bank has their specific guidelines and either you fit into their guidelines or you dont.

Mortgage brokers have access to wholesale loan servicers and programs and are able to pass these wholesale rates to their clients. A bank has basically 1 rate for each program. A broker can beat a bank rate by half a per cent or more consistantly.

You may have heard the marketing pitch "When Banks Compete, You Win". That's literally what happens when you use a well respected mortgage broker. Mortgage brokers enjoy "wholesale" pricing from banks, significantly less expensive in fact than what banks are willing to offer borrowers directly. By creating competition between hundreds of banks, investors, and other lenders across the country, mortgage brokers prevent banks from holding you hostage to their "retail" rates and their idea of what program works for you.

The standard definition of a mortgage broker is: "a person or company that acts as an intermediary who sources mortgages on behalf of individuals or businesses."

The best way to explain why you should use a mortgage broker is with an analogy. Most people have a family physician and that physician has some knowledge in a lot of areas of medicine. The family physician can help you with a lot of minor illnesses. But, if you have a serious medical condition such as cancer, you should go to an oncologist who is a cancer specialist. Most people have a bank they deal with and banks have some knowledge in a lot of areas of finance. If you have a simple financial transaction to do, banks can help you with it. But, if you have a complex financial transaction to do such as a mortgage, you should go to a mortgage broker because they are mortgage specialists.

Using a mortgage broker can be better than a bank because they have access to different lenders. If you have a unusual situation a mortgage broker can find a solution for you.

Banks cannot compete with the large number of wholesale lenders Mortgage Brokers have competing for their business, which allows Mortgage Brokers to give you the lowest rate and the best program to fit your financial situation. Mortgage Brokers can still help even if you have issues with your credit or if you have recently discharged a Bankruptcy.

You should also expect to receive a higher level of service from your mortgage broker as opposed to the service you may receive at your local bank. Remember, mortgages is all that mortgage brokers do where as mortgages for your local bank may not be their primary source of business and as a result not their primary concern.

The great thing about mortgage brokers is that if your loan is for some reason denied they can switch lenders without consequence. at a local bank if your loan is denied that is generally the end of the transaction, banks most times offer no flexibility.

Findings from a recent study conducted by researchers at George Washington and Oklahoma State Universities discovered that mortgage brokers help their customers save as much as half a percent on their mortgage rates!

Using a mortgage broker will save you time and money. Why? Because they have access to 100's of wholesale lenders and get lower rates than your local bank.

Remember that the goal of the bank is to sell you their mortgage product. The goal of a mortgage broker is to get to know you and your financial situation and then find the mortgage product that meets your needs. In addition, mortgage brokers can often offer you better rates than the bank because they are shopping amongst all their lenders for you.

 

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 Information listed above is to be used for educational purposes only and is not guaranteed

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