Found a house you love? Thinking of buying it?
Well, what are you waiting for? We agree with the famous slogan and say, “just do it.” The truth is, now is the time to buy.
Not sure where to start? It’s okay; the home mortgage process is complicated and intimidating. That’s why we suggest getting a mortgage broker.
Read on to learn everything about finding the right mortgage broker for you.
What Does a Mortgage Broker Do?
First thing first, let’s talk about what a mortgage broker does and how they can be beneficial.
Brokers are licensed professionals who work as the middle man between a borrower and a lender. Their job is to find a loan that is in the borrower’s best interest.
Mortgage brokers do a lot of the leg work. They will work with several different lenders and find the best one. They can pull credit reports, compare interest rates, and verify your income and employment.
They then use this information to apply for loans on the borrower’s behalf. They will collaborate with the underwriting department, the title company, and the real estate agent to make sure the transaction runs smoothly.
First Step: Strengthen Your Credit
Before you even think about applying for mortgages, you need to check your credit score. Lenders will base how much they will loan you and the interest rate on your credit reports.
If your credit score is lower than expected, search for errors, late payments, or accounts in collections. Take care of any outstanding debts as soon as possible. Even paying down credit card balances to lower than 30 percent of the available line of credit will help improve your score.
Pay attention to your debt-to-income ratio. Most lenders will only allow a maximum ration of up to 50 percent. To keep your rate low, avoid applying for new credit cards or other loans for at least three months before you apply for a mortgage.
Is a Mortgage Broker Right for Me?
After you have tidied up your finances, you can start thinking about hiring a mortgage broker. Here’s what a mortgage broker can do:
- Help with the pre-approval process
- Apply for loans with different lenders on your behalf
- Negotiate terms and rates
- Save you time
- Take care of all the back-and-forth communication
- Make sure that the loan process stays on track
- Can often get better pricing through their network
- Help you understand the terms of the loan
How to Find the Right Mortgage Broker
If you like to save time and money, then a mortgage broker might be right for you.
Here’s how to find the right one for you:
Start with Referrals and Reviews
Chances are that you know someone who has worked with a mortgage broker. You just need to start asking around.
Ask your real estate agent. Ask your friend who just bought a house. Ask your uncle who works in the neighborhood credit union.
This is the best way to start looking for a broker to work with.
Once you have a few names, head to the Internet and look for online reviews.
Online reviews are the tell-all of the business world these days. If a mortgage broker has several 5-star reviews, then you know that their clients had a positive experience.
Another place to check is the Better Business Bureau. This site will help you get an idea of their reputation. If anyone has been unhappy with their service, they can report it.
You’ll also want to make sure they have a current mortgage broker’s license by checking your states licensing authority.
Hold Your Own Interviews
Don’t hire the first broker you find. Take some time and hold a few interviews. These can be done on the phone and won’t take much time, but it can end up paying off in the long run.
First, ask them for some names of clients that you could call. You may not have any desire to call their former clients, but if the broker can give you a name, that means he’s comfortable with your calling and asking about their experience.
Ask about forms of communication — this is an essential part of the loan process. Discuss how communicated is handled.
Do they have a system of how often do they check in with their clients? Will you hear from them regularly throughout the process?
Are they patient? Will they help you understand the complexities of getting a mortgage?
Going through this process can be overwhelming especially if this is your first time. Will they take time to answer your questions in a way that will make sense to you?
Ask about Commissions
There are a few different ways that mortgage brokers can be compensated. Because they’re usually independent contractors, the circumstances may be different with each one.
If the broker gets paid commission by a lender for every loan, be careful. They may lead you to a lender who is not the best option for you. But, if your broker is paid by the lending company, it saves you from paying them.
The other option is you pay the broker. The fee usually around one percent of the loan amount. This means the higher the mortgage amount, the higher their commission — be careful they don’t steer you toward a higher mortgage.
And just so you know, brokers will either get paid by the lender or the borrow — never both.
Consider a Long-Term Business Partnership
Find a mortgage broker who you could work with again and again. While most of us don’t get new mortgages every year, you may want to keep his number for the future.
When home-owners refinance, but a vacation home, or decide to upgrade and move again, having a broker that you know and trust will save a lot of headache and stress.
Mortgage Broker Near Me
If you’re looking at buying a home in North or South Carolina, don’t hesitate to contact us. It’s an exciting time, but also a process that can feel overwhelming and stressful.
Let us help you by simplifying the process. Our mortgage brokers can help you save time and money. So let’s get going and get you into that house you’re dreaming of!