Deciding to buy a house is a big first step in many people’s lives, which is why the realtors here at Beach Loop walk our buyers through each part of the process. We’ll point our buyers in the right direction on choosing a good mortgage company that will take care of them
The typical mortgage runs for 30 years which is a large portion of anyone’s life. Choosing a mortgage lender could decide how easy that process is for both now and later. Also, choosing the type of mortgage you decide to get could play a large factor in how the mortgage is paid off.
Should You Choose a Mortgage Broker or Direct Lender?
The biggest difference between a mortgage broker and a direct lender (or bank mortgage or mortgage lender) is that the broker is someone who helps you find the right lender. And that’s it, I could end this section right here. But why would you want to pay a mortgage broker to do this for when you can just look for a lender yourself?
Applying for a mortgage requires a lot of paperwork and certain mortgage lenders won’t even look at an application if it doesn’t meet certain criteria on paper. A mortgage broker will take all of your financial documents and research for you what lenders are likely to lend you the money you need and present you with the best options that fit your situation. This takes a lot of headache out of the situation for you.
Tips for Choosing a Mortgage Broker
So that sounds great, but now how do I know which mortgage broker to choose? Here are some tips to consider when looking for a mortgage broker:
Brokers are often commission-based. This means that they may work mainly with certain lenders.
A broker may be able to negotiate or manage lender fees. If they have a good relationship with a lender, the lender may not charge them the normal fees.
If you contact the broker ahead of time you may be able to find out what mortgages are available to you.
You can often find reviews or testimonials on mortgage brokers to see if their results suit your needs.
Just because a broker has a relationship with a particular lender isn’t a bad thing. This may save you on fees in the long run. If a broker consistently chooses a particular lender without regard to their clients, real estate agents and clients will catch on and you can find this in the reviews.
How to Choose a Mortgage Lender
Mortgage lenders are not all equal. Some disclose their fees upfront and some do not. Some have different fees for different loan amounts and service fees for lending you money. It’s best to shop around and follow these tips below for choosing a lender:
Some lenders work specifically through brokers.
Use sites like Bank Rate to find out what banks offer mortgages or call your own bank.
Get a closing cost quote from more than one lender. Just because they have the same rates, doesn’t mean the closing costs will be the same. They all charge different fees.
Even after finding a lending company that looks good you may still be forced to work through a broker with some companies. Try to find out during the comparison process if this is the case with a lender you have in mind. You can always call and ask if they do use a broker they will likely push you in that direction right away anyway.
What to do Before Choosing a Mortgage Company
Whether you decide to do your own research or go through a mortgage broker, there are some things you can do to make the process easier for everyone involved:
Fix your credit score – you can check it for errors or use a credit reporting tool to find out what you can do immediately to raise your score.
Get pre-approved – even if you don’t go through that lender it will give your broker an idea of what they’re dealing with.
Find out about fees – ask the lender what they’ll charge at closing for the loan.
Loan requirements – find out the minimum requirements for mortgage loans. Typically the larger companies will try to stay more competitive and have lower requirements than local banks.
If you have any questions about the loan process, get in touch with one of our agents. We can help guide you.
Contact us Today to Buy a House
The realtors here at Beach Loop are able to help you through the whole buying process. We’ll be happy to give you referrals to local lenders to help with choosing a mortgage company. If you are already pre-qualified and working with someone, we can help you as well. Call us now so we can get started on finding a home you’ll love.