Should you Consider Using a Mortgage Broker?
Could you benefit from using a mortgage broker? Under what
circumstances should you think about using a mortgage broker? If you are
a first time home buyer you may find yourself asking these questions.
If you are considering purchasing a home in the near future, there are
some things that you should know. While buyers today need guidance more
than ever when it comes to buying a home, there are increasing numbers
of lenders who are flat out refusing to approve any loans that started
out through a mortgage broker. This certainly puts buyers today in a
difficult situation. While you need the guidance that a mortgage broker
can provide, the question remains whether you should run the risk of
working with one or try to go it on your own.
If you do consider working with a mortgage broker, you should understand
why so many lenders are now reluctant to work with them. At the top of
the list is the fact that in the past many of the applications that came
through mortgage brokers resulted in problematic mortgages. Lenders
today are much more circumspect and wary and naturally want to make sure
that they take only the most suitable loan applicants, which is why they
are choosing to steer away from mortgage brokers.
Of course, that does not mean that all lenders will refuse to accept a
loan just because it came through a mortgage broker, so if your credit
is solid then you may still have a good chance of having your loan
approved, even if you did start out with a mortgage broker.
One thing that you need to be aware of when choosing to work with a
mortgage broker is that you are not restricted to working with just one
broker. This is one mistaken assumption which many people seem to
continually make. Keep in mind that you have the right to work with as
many mortgage brokers as you want until you find the loan with the terms
that you are looking for.
Overall, shopping around for a mortgage will probably be easier on
everyone as well as a lot faster if you choose one specific type of loan
and then restrict your mortgage shopping to that type of mortgage only.
Also, keep in mind that mortgage rates as well as terms can and do change on a
daily basis, so make sure that you do not spread your shopping out over
a long period of time. If you want to make sure that you are really
comparing apples to applies, make sure that you keep your shopping
spread out over no more than just a few days.
You should also know that mortgage brokers are not automatically bound
to work in your best interest. This has been a large part of the problem
that has spurred many banks and lenders to be reluctant to work with
loans from mortgage brokers recently. The real problem stemmed from the
fact that some brokers were appeared to have been paid for steering
consumers toward certain types of mortgages, regardless of whether that
type of mortgage was in their best interest or not. Never assume that a
mortgage broker is bound to work in your best interest. If you want your
mortgage broker to work in your best interest, ask them to sign a form
stating that they will do so. The broker may or may not be willing to do
so, but at least you will know upfront where you stand.
Keep in mind that working with a mortgage broker can definitely provide
you with some great advantages. If you find that you are short on time
and simply do not have a lot of time to shop around for different
mortgages, then a mortgage broker can help to take over some of the
tasks for you by identifying different options when it comes to
mortgages. Just keep in mind that this does not mean that the broker
will take the time to hunt down every possible mortgage option that
Overall, working with a mortgage broker can be a good idea if you need
help in locating different types of mortgage options. Provided that you
take the time to understand where you stand with a mortgage broker and
understand that the broker is not always obligated to work in your best
interest then you may find working with a mortgage broker helpful. If,
on the other hand, you have some time on your hands, then you may find
it better to do all of the research on your own.