Title:
Mortgage Brokers
– The Nuts and Bolts
Word Count:
494
Summary:
Using a mortgage
broker to shop for home loans can make the borrowing process a lot less
stressful than doing it yourself. Here are the nuts and bolts on getting a good
broker.
Keywords:
mortgage,
mortgages, home loan, loans, refinance, heloc
Article Body:
Using a mortgage
broker to shop for home loans can make the borrowing process a lot less
stressful than doing it yourself. Here are the nuts and bolts on getting a good
broker.
Competent Mortgage Brokers
There are a couple of obvious situations where going with a mortgage broker
makes perfect sense. If you have less than perfect credit, a mortgage broker is
going to be able to open your eyes to numerous loan options a traditional bank
would never tell you about. If the idea of handling the mass of paperwork
involved in the loan application scares you, a mortgage broker is definitely
going to be a savior since they will take on that burden. Still, how do you
know if you are talking to a competent broker?
The first issue to address when considering whether to use a mortgage broker is
scope. Scope refers to the number of
different lenders the mortgage broker works with in home financing. Generally
speaking, the more lenders the broker works with, the better mortgage options
you will get and, ultimately, the better financing. A good mortgage broker
should have at least eight different lenders they work with and be able to go
find others should your particular situation call for a special financing
package. If the broker identifies only two or three lenders, you need to move
on to the next broker.
The second biggest issue is the mortgage broker’s knowledge of the lending
industry. By knowledge of the industry, the broker should be able to identify
multiple lending programs and the various lenders and options for each. For
instance, you might ask the broker who he works with and the loan options
available for a person with a 580 [poor] credit score. Further, ask the broker
if he has arranged funding for such loans before and the specifics of the loans
used. If the broker shows a depth of knowledge and starts rattling on about
options, you’ve found the correct broker. If they don’t, you haven’t.
Broker Fees
Mortgage brokers are paid upon performance. If they don’t get you a loan, they
don’t get paid. The positive aspect of this is you can be the mortgage broker
is going to bust their tail coming up with a solution for your problem. The
negative aspect is you need to make a determination as to whether the options
give to you are good loans for your situation. The commission of a mortgage
broker is typically paid out of the loan proceeds, but costs such as appraisals
are your responsibility. The broker should have no problem telling you their
commission rate on the loan.
If you don’t trust banks to give you the best deal or have been turned down by
a lender, mortgage brokers are a great way to find good deals. Understand the
nuts and bolts of what they do and you are on your way to getting a loan.