6 Key Tips for Finding the Best Mortgage Broker

 It's important to find the best mortgage broker to work with when buying a house. Keep reading for six key tips for finding the best mortgage broker.

 Believe it or not, the average person moves more than 11 times in their lives. But when you find the perfect house to call your own, that cycle of moving from place to place stops quickly.

But there’s more to buying a house than finding the home of your dreams. You still need to get a mortgage and finance the purchase.

If you’re like most first-time homebuyers, finding the perfect mortgage can feel like a complete mystery. A mortgage broker can help simplify the process.

But how do you know if you’re working with the best mortgage broker? Here are a few simple tips to keep in mind during your search.

1. Understand the Difference Between Lenders and Brokers

When you think of applying for a loan, you likely think of heading to the bank or filling out a form online. These are great methods, but they’re not the only way to go about finding the right mortgage for your new home. In fact, you have two main choices: working with a direct lender or working with a mortgage broker.

Direct Lender

A direct lender is a loan issuer. They provide the mortgage and supervise the application process when you contact them.

When you work with a direct lender, you’re stuck applying for a loan with each lender you’re interested in. This can be time-consuming when you’re looking to close on a house fast.

Mortgage Broker

Mortgage brokers are lending experts. They have a network of lenders they partner with to offer you better rates and loan terms on your mortgage.

Unlike direct lenders, your mortgage broker partners with more than one loan provider. This means you’ll have more options to choose from and can be more selective about loan terms, interest rates, and required down payments.

2. Ask for Referrals

Your real estate agent should have a few people they know and trust to help you get the best mortgage possible. Start with them.

If your real estate agent doesn’t have someone they like, ask your friends and coworkers. Anyone who recently bought a house had to navigate the same mortgage situation you are right now.

They have recent experience with lenders and brokers and should be more than willing to share those experiences with you.

If everyone you know worked with a direct lender, turn to the internet and search for brokers in your area. Once you have a list, do a little digging and research the reputation of each broker.

While online reviews aren’t always accurate, you can judge by their trends. If most of the reviews are overwhelmingly negative, keep looking. But if most of them are positive, you should be in good hands.

3. Meet with More Than One Broker

You wouldn’t work with a direct lender without speaking to another to compare options. So, why would you work with the first broker you find?

Schedule consultations with a few brokers in your area and meet with them. Pay attention to how they respond to your questions and your concerns. Do they respond clearly or do you feel more confused after the appointment than you did when you walked in?

Remember, the best mortgage brokers communicate complicated financial information in a way you can understand. And if you’re still confused, they’re willing to explain things further until you understand them.

If a broker gets frustrated with you or doesn’t answer your questions to your satisfaction, keep looking. After your meeting, you should always feel like you have more information about mortgages than you could gather on your own.

Compare the information you got during each consultation

4. Look for Brokers with Multiple Lending Partners

As we said before, mortgage brokers work with multiple loan providers. It’s how they help you find the best option for your needs. But some brokers only work with a small number of providers.

The fewer lending partners your broker works with, the fewer mortgage options you have. This means you could end up paying too much for the mortgage.
Look for brokers with a large number of lending partners. This will help you get the best deal possible.

5. Pay Attention to the Products They Offer

There are dozens of types of mortgages out there. And some may be better for your financial situation than others.

When searching for brokers, make sure the ones you consider working with offer more than one or two mortgage types. Otherwise, you could end up paying more for your house over the life of the loan.

Further, the brokers should be able to explain which mortgages are best for your situation. This means being able to explain different qualification standards clearly.

6. Make Sure They Can Save You Money

Brokers work on commission. This means they earn a percentage of each sale they make. In this case, the sale is your mortgage loan.
 
While commission means you’re not having to pay high fees out-of-pocket for their services, it does mean you need to be cautious when choosing a broker.
 
Great brokers work to get you the best loan for your needs regardless of the amount of commission it will give them. Bad brokers only recommend loans that put the most money in their pockets.

Before you choose a broker, think about how you feel about their recommendations. Are they actively giving you recommendations that will save you money in the long run or are they recommending something that’s not ideal?

If you feel that a broker is only in it for the commission, keep looking. Working with them would barely be different from working with a direct lender.
 
But if a broker explains how each loan works and the costs you can expect, listen to them.

Final Thoughts on Finding the Best Mortgage Broker

Finding a mortgage is difficult enough. But when you work with the best mortgage broker you can find, you’ll be able to save money and simplify the application process.
Looking for a few more tips and tricks to make your home-buying experience better? Check out our latest posts!
 
 
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