Choosing an excellent mortgage broker could make all the difference between you losing your property and keeping it. Top mortgage brokers like Ascension Finance understand the importance of providing their clients with the long-term support they need to ensure that their loan repayment plans are convenient. For instance, an excellent broker will ensure that the type of package you choose fits well with your income level. They will not allow you to buy a house that you don’t normally qualify for, all for their selfish interest.
To help you with your decision-making, we have compiled a list of things to consider when picking a broker. But first, it is important that you truly understand what a broker does and why you need them.
Functions of a Mortgage Broker
Mortgage brokers serve as intermediaries between borrowers and lenders in the real estate world. These experts also gather financial information about assets, employment documentation, and more to assess borrowers’ ability to secure financing.
A broker gathers loan options from various reverse lenders for borrowers who are considering buying a new home or refinancing. Another important function of a broker is to determine the appropriate loan amount, borrower’s ideal loan type, loan-to-value (LTV) ratio, and submit loans to lenders for approval. They also serve as the communication bridge between borrowers and lenders during the entire transaction through to closing.
Since mortgage funds are loaned in the mortgage lender’s name, mortgage brokers only collect a commission called an origination fee from the lender as compensation for their services.
It’s also important to note that brokers only get paid when a loan transaction is completed.
Why Should You Use A Mortgage Broker?
Hiring a mortgage broker is simple and easy. Usually, you’ll only need one meeting to hire them, and it can be in person or over the phone.
There are several reasons why you should hire a mortgage broker instead of going to a lender yourself. However, the two most important reasons why you should use them are; convenience and a variety of options.
When it comes to documentation, brokers often ask clients to send their files through email for their convenience. Also, since they work with numerous mortgage lenders, they will naturally provide you with a list of options to choose from. When you apply for a mortgage at a bank or credit union, they only give you access to the products they offer in-house, but it’s different when it’s a mortgage broker.
Things To Consider When Choosing a Mortgage Broker
There are several ways to choose a mortgage broker. However, the best way still remains through recommendations from trusted sources—usually family and friends. However, if you don’t have that luxury, you can rely on a simple internet search. Whichever part of the world you are in, there is surely a mortgage broker near you.
Before deciding to hire a broker, you must ensure that they are trustworthy and will do an excellent job. One of the ways to make sure of this is by checking online reviews from past clients. You will usually find these honest reviews on their website and independent platforms like the Better Business Bureau, Yelp, Google My Business pages, Yellow Pages, etc.
With regards to payment, mortgage brokers don’t demand payment from clients since they are compensated by the lender, so beware of any mortgage broker that demands payment for their services after being hired. You should also ensure any mortgage broker you decide to work with is properly qualified and registered.
Also, when choosing your mortgage brokers, it’s best to choose a broker described as ‘Whole-of-Market.’ This means they’ll have access to every mortgage available on the market at the time
What to Look For In A Mortgage Deal
The number one thing to consider before taking a mortgage deal is whether the lender offers free conversion on any of their loans within or after a lock-in period. This feature makes it easy to move from one loan package to another within the same bank without having to pay any fees.
Another thing to consider is if the home loan offers cash rebates or legal subsidies. When refinancing your property, the costs involved include legal and valuation fees. To subsidize these costs, most banks add cash rebates or legal subsidies to their loan packages.
Before accepting a mortgage deal, It’s also important for you to know if the bank will waive any penalty put in place in case you decide to sell your property. This could be a partial or full penalty waiver. This is because most bank loan packages usually come with two to five year lock-in periods. As such, a penalty will be charged if you decide to sell your property during this period. However, some banks also offer partial or full waivers on those fees charged if they are notified in advance. This helps save a lot of money.