So you’re ready to buy your starter home. You have a stable income, a healthy credit report and a good credit score to back you up during your mortgage application. Then while doing your research, you come across mortgage brokers. Do you really need to work with one, or is it just another added expense to your tab?
Mortgage Brokers act as middlemen between you, the homebuyer and mortgage borrower and the potential lender who will finance the home purchase. These are licensed professionals who do the legwork for you to acquire a good mortgage deal. To help you determine if hiring a mortgage broker will be beneficial when applying for Fha Loans Midland Texas or even Conventional Loans or VA loans, here are some facts that you need to take note of.
Mortgage Brokers Can Help You Get A Mortgage Even With A Bad Credit.
While a perfect FICO score is not a requirement to get approved for a mortgage, lenders will still require borrowers to have a good credit score to qualify for a loan. By using a mortgage broker, their connections allow them to find a lender willing to give you a mortgage even with a less-stellar credit. They can negotiate the terms and find the best loan products that will fit your situation.
Good Read: 7 Smart Ways to Build Good Credit
They Can Help Waive Some Fees Off Of Your Loan.
Mortgage brokers know the ins and out of a mortgage. Their connection allows them access to non-traditional home loans, plus can help waive some loan fees for you. You get to save money and won’t be required to pay unnecessary fees upfront or during closing.
The Charge A Mortgage Origination Fee.
A lot of mortgage brokers get paid on a commission based-salary. This means they get paid a certain amount for their services. They typically charge borrowers 1% of the loan amount at closing. They call this fee the Origination Fee. This is the only possible drawback since you’ll be paying them 1% of the loan in exchange for their professional services.
There Are Two Main Types Of Mortgage Brokers.
Whole Market Brokers are mortgage brokers who can offer a greater pool of home loan options you can choose from. They don’t have a specific link to a single broker, giving them more connections they can use in helping you find a good mortgage deal. Tied or Multi-Tied Brokers, on the other hand, are directly “tied” to single or multiple lenders that offer exclusive deals. However, your mortgage options tend to be more limited due to their exclusive connection to the lender/s.
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They Can Help Alleviate The Stresses That Comes WIth The Mortgage Process.
Finding the right lender and sealing a mortgage deal with reasonable rates and loan terms takes time, effort and even a significant amount of cash. By hiring a mortgage broker, you get to save some of your precious time and effort since they’ll be doing the hard work for you. You also get to save money with their ability to negotiate terms and fees, making the mortgage process a lot less stressful and complicated on your part.
These are some of the things worth knowing before you hire a mortgage broker. If you do decide to hire one, find a licensed individual with a good reputation and knows what they are doing. Ask for recommendations and don’t forget to do your research.