If you’re planning to take out a mortgage, then an independent mortgage broker can help you through the process, from initial underwriting to closing and beyond. However, not all homebuyers understand how mortgage brokers work or the value they can bring to the table.
Here’s a look at five key reasons you may want work with one instead of going it alone.
- No cost to the buyer: Many people assume that it costs big bucks to work with a mortgage broker. Imagine their surprise when I tell them that in nearly all cases, a mortgage broker’s services are completely free to the homebuyer! (In rare, complicated cases, there might be a fee because the credit, property or income requires more legwork to verify.) The lender typically pays the mortgage broker a commission once the deal closes, but the homebuyer never even sees this bill.
- Opportunity to compare rate and options: When you apply for a mortgage directly from a bank, the bank’s mortgage specialist can only offer you that bank’s mortgage offerings. With an independent mortgage broker, you get the opportunity to comparison shop with multiple lenders, potentially saving you thousands of dollars over the life of the loan and matching you to a mortgage that better fits your needs. Is mortgage portability important to you? Do you anticipate needing a HELOC down the line? Are you planning to make lump sum prepayments? A mortgage broker can help you find the right loan and walk you through different amortization periods and options.
- Help through the underwriting process: Those who’ve never applied for a mortgage may be overwhelmed by the amount of paperwork required. Lenders want to verify your credit history, employment status, income, assets and the appraised value of the property you’re buying. Whether you’re a first-time homebuyer or a more seasoned one, a good broker can help you through the underwriting process. Brokers are also helpful for self-employed borrowers or those who are new to Canada and may have a tougher time understanding their options and qualifying for a mortgage.
- Assistance over the course of the loan: When youtake out a mortgage directly from the bank, you might speak to a different person each time you have a question. Not so with a mortgage broker. He or she can help you throughout the life of your life, whenever you have questions on refinancing or porting your mortgage or decide to pay it off more quickly.
- Real estate connections: Say you need a home inspector to check the wiring and plumbing in the property you plan to buy. Or maybe you need a good real estate agent to show you potential properties or a home stager to you sell your current home. Mortgage brokers are often well-connected within the local real estate market and can connect you to other qualified professionals.
There are lots of reasons to work with a mortgage broker, but perhaps the most compelling one is the simple fact that it can save you valuable time and money.