Saturday

Why use a Mortgage Broker?

Most of think that mortgage brokers are only for people who have bad credit or were turned down by a bank. Unfortunately, anyone with this kind of outdated thinking could be losing thousands of dollars! New home buyers and all homeowners can save time and money by using the services of a mortgage broker. A mortgage broker has access to many competing lenders, including banks, pension funds, trust companies and even private individuals. While you may arrange a mortgage every five years, mortgage brokers are completing thousands of mortgages each year. This enables them to negotiate better interest rates, which can be passed on to their clients. There are other potential cost savings. On any given day, a particular lender may have a special rate offer for a specific mortgage term.

Many home buyers take the quote from their bank and choose a term and rate offered by the lender without realizing that a mortgage broker may be able to save them up to one percentage point off the posted rate. To ensure you get the best rate, it’s best to contact a mortgage broker at least three or four months before you renew your mortgage or consider a new home purchase. Mortgage brokers can usually guarantee an interest rate for 90-120 days. If rates go up you'll get the guarenteed rate, should rates drop in the meantime, you would get the lower rate. You also need to consider that when you shop from lender to lender, there is an accumulation of inquires on your credit bureau report, affecting your credit rating. This isn’t the case with a mortgage broker who only does one inquiry yet can still get many competing lenders to quote on your business.

What About Fees?

Some people think that using a broker will cost them lots of money. Mortgage brokers usually don't charge any fee because the lender that provides the mortgage pays the mortgage broker a fee for seding a client to the mortgage lender. A fee may still be charged to clients with impaired credit, or when private money is used. Mortgage brokers usually charge a fee to arrange a commercial mortgage. A mortgage broker can potentially save you lots of money. I suggest that you talk to a professional mortgage broker before getting any kind of mortgage. Most of them don't charge any consultation fee, so you got nothing to loose.

2 comments:

Anonymous said...

For more information on why you should use a Mortgage Broker, please visit my article on the topic at Top 10 Reasons to Use a Mortgage Broker vs. a Bank Lender.

Dave Pulsford said...

A good mortgage broker will clearly state how they charge or do not charge a fee as regulated by the FSA. Therefore mortgage advice (uk) is regulated so search for a good broker near to you.

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