5 Tips for Finding the Best Mortgage Broker

Written by Posted On Wednesday, 08 May 2019 08:43

The first decision to make when preparing to get a mortgage is deciding whether to use a broker or a mortgage lender. Most first time homebuyers don't realize there's a difference between the two. A mortgage broker is actually the middleman between mortgage lenders and potential borrowers. A mortgage lender, on the other hand, is the one who provides the actual funding for the property. Choosing to use either of them has its own pros and cons, but they can both manage to sell you a mortgage loan. Here are a few tips for choosing the best mortgage provider:

 

Check Your Credit Score

It's imperative that you check up on your finances long before you start shopping for a mortgage . This gives you ample time to fix them if need be. Your credit score is the first thing any mortgage provider will look at. The higher your FICO score is, the greater your bargaining power. Get your report for free from one of the three major credit bureaus. Ensure everything is accurate and if you don't have an excellent score, work on improving it . Taking a year or two to build it up will absolutely have long-term advantages when the time comes to find a lender.

 

Know Your Lending Options

Most borrowers assume that the best mortgages are offered by big commercial banks. Just so you know there are several other great players in the crowded lending field. Some of them include credit unions, correspondent lenders, savings & loans, mutual savings banks, mortgage brokers, hard-money lenders, smaller community banks, etc. The best mortgage provider is subjective; therefore, go for one that best suits your needs. Be sure to search Better Business Bureau (BBB) for unbiased reviews and information.

 

Compare Lenders

Settling on the first mortgage provider isn't always the best idea. The ultimate reason for shopping around is to find the lowest rate and the best loan terms. Be sure to compare rates, fees, closing costs, and down payment from various lenders. Nowadays, it's possible to compare rates online, just note that they are simply an estimate. A broker or lender will have to check your credit information and process your mortgage application to give an accurate rate.

 

Get Approved

Once you settle on three or four mortgage providers, apply for pre-approval with all of them. A pre-approval letter is issued once the lender has done a thorough review of your credit and finances. It proves that a lender is willing to lend to you a certain amount of money. Be sure to compare pre-approval options and settle on one with the best rates and terms.

 

Read the Fine Print and Ask Questions

Loan documents may make your eyes glaze over, but not reading through them carefully could cost you dearly later on. On top of loan terms being so confusing and complicated, lenders can add inclusions that haven't been adequately explained to you within your mortgage. Pay close attention to the interest rates, processing fees, closing costs, down payment, monthly payments, cancellation terms and fees, what happens if you default on your mortgage, and other important details. Always ask questions  if you don't understand anything. While you at it, gain insights into the lender's communication skills and level of professionalism.

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James Stevenson

Hi, My name is James and I've been involved in the property and real estate industry for 10 years now. I hope people will like to read about my thoughts and experiences in the industry and please contact me if you want to discuss my articles further!

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