21 Nov 5 Important Facts about Mortgage Brokers
You’ve found your Sunshine Coast dream home, and now it’s time to find the best mortgage to help put those keys in your hand as fast as possible. One way to make it happen: work with a mortgage broker who can help guide you through the lending process from beginning to end.
You’ve most likely heard the term “mortgage broker” from friends or even your real estate agent. But what does a mortgage broker do exactly? And how does their job differ from let’s a private lender at a bank?
We’ve listed the answers to the most common question asked about mortgage brokers.
- What is a mortgage broker, exactly?
The best way to explain what a mortgage broker is and what they do is by thinking about them as the middleman between you and possible lenders. A mortgage broker’s job is to work on the borrower’s behalf and with different banks to help their clients find the best lenders to fund the purchase of their home.
Mortgage brokers should be licensed and regulated and often have a well-established list of available and stable lenders they can work with on your behalf. They will do all the legwork and put your credit and financial history together and will use it to apply for loans.
- How are mortgage brokers paid?
Similar to most other sales professionals, mortgage brokers are paid a commission for writing the business. It is typically a percentage based on the loan amount and paid by the lender (this means there is no added costs to the borrower).
- What are the benefits working with a mortgage broker?
Rather than going the lending process alone, a mortgage broker will make sure you don’t have to and can submit your request for a loan to multiple banks within a short amount of time. They will help save you time and could land you some better rates than if you chanced it alone.
- What are the drawbacks?
In order to use a mortgage broker, you will most likely have to pay them a percentage of the loan upon closing. For example, if it’s 1% of a $300,000 loan, then expect to pay $3,000 to your broker. It’s necessarily a drawback per se since they will help save you a lot of time, and possibly money in the process.
- How to choose the right broker.
Start off by asking friends and family for referrals, but try to make sure the person who is referring the broker has actually used them. Ask questions and see if you can learn more about the broker’s service, level of knowledge, their communication style, and approach to clients. You can also ask your agent for some names.
Make a short list of names, sit down and interview the potential brokers. Ask them about fees, borrowing rates and anything else you feel is important to help the process run smooth.
If you’re looking for the right mortgage broker to help you buy your Sunshine Coast dream home, click here to learn more about our lending services and to see if we can help.