Buying a home is a major purchase, and it is a decision that deserves careful consideration. In addition to finding the right house in a neighborhood you like, you will be making a commitment to pay a certain amount of money each month for many years or decades if you are getting a mortgage. It makes sense to explore all of your mortgage options before proceeding, and a mortgage broker can guide you through this process.
What Is A Mortgage Broker?
A mortgage broker serves as a middle party between you as a homebuyer and potential mortgage lenders, such as banks. Mortgage brokers are licensed and regulated professionals who can originate loans for you, but they do not close or fund the mortgages themselves. Your broker will compare mortgage lenders on your behalf to help you find an interest rate that suits your budget.
The main advantage of using a mortgage broker over going to a bank is the fact that mortgage brokers work with a stable of lenders. This means they will be able to comparison shop for you and help you secure the best rate available given your financial situation and credit score. Banks, on the other hand, can only offer you their own products, which can limit your options significantly.
Brokers will also perform much of the legwork involved in getting a mortgage.
Outlined below is a look at when you should talk to a mortgage broker.
When You Are First Considering Buy A House
If you are considering purchasing a home, talking to a mortgage broker as early in the process as possible can help you set realistic expectations. Finding the home of your dreams and then discovering it is not within your financial reach can be disheartening. Although online calculators can serve as a good guide, meeting with a mortgage broker and allowing them to review your income, credit history, employment and other documents can help you narrow your search to homes you can truly afford.
When You Have A Down Payment Saved
When you have saved up what you believe is enough money for a down payment on a home, it is a good time to meet with a mortgage broker. This can help you determine how much home you can realistically afford with your down payment. If you discover that you do not have enough money saved for a traditional down payment on the type of home you want, there may be alternative loan products available to you.
When You Have Unique Borrowing Challenges
A mortgage broker will have experience helping borrowers with unique challenges obtain mortgages. If you have a lower credit score or down payment or inconsistent or non-W2 income, brokers are generally more familiar with lenders who cater to non-traditional borrowers. They can give you insight into your chances of getting approved and recommend loan products suited to your situation.
When You Are Planning To Talk To A Real Estate Agent
If you are at the stage where you are looking for a real estate agent or planning to meet one soon, it is a good time to get your paperwork in order and talk to a mortgage broker about getting preapproved for a loan. This allows you to demonstrate how serious you are about buying a house when you meet with a real estate agent or a potential seller. Having preapproval signals that you are not merely looking and that you have the financial means to buy the home.
Getting preapproval does not mean that you have to get your loan from that lender; you are free to continue applying for loans from other lenders as well.
When You Want To Buy A Home As An Investment
If you are an investor, a mortgage broker can help you to protect your profit margins by obtaining the lowest-rate loans possible. Investors often lack the time to shop around for the best mortgage and may also need a quick turnaround on their application, and mortgage brokers can help in both regards.
Choosing A Mortgage Broker
The best way to find a mortgage broker is by asking friends or family members for referrals. However, you will want to ensure that they have actually used the mortgage broker and had a good experience with them rather than simply sharing the name of an acquaintance.
If you already have a real estate agent, you can ask your agent to recommend brokers they have worked with in the past who are trustworthy. Big real estate companies may offer their own in-house mortgage broker, but you are not obligated to use this individual.
It may be necessary to interview a couple of potential brokers to find out about their experience and services before making a decision.
Reach Out For More Info On When Should You Talk To A Mortgage Broker
No matter how far along you are in the process of purchasing a home, it is a good idea to speak to mortgage brokers to find out how you can get the best loan product possible. Get in touch with the experienced team of mortgage brokers at MyLendingPal to learn more about the options available to you.