Between all of the websites, banks, and credit unions which are out there, it\’s easy for borrowers to feel lost while shopping for a home loan. Mortgage brokers have access to all of the choices on the market, but they do the shopping for borrowers, to eliminate confusion. Borrowers who use a broker will save both time and money on their loan package, and will receive a level of personal service that a lender does not always provide.

A broker works with a borrower to find a lender for their mortgage or refinance. A broker begins by collecting the type of information that lenders collect, such as employment and income information. Based on that information, a broker assesses which type of loan will work best for the borrower. The broker will then contact multiple lenders, to help the borrower find the lowest interest rate possible, on the right type of loan.

A broker will charge for their services in different ways. Sometimes, a broker charges closing costs upfront, including a loan origination fee. At other times, the broker will be paid via yield spread premium, which causes the borrower to have a higher APR. Borrowers should ask their broker about charges before any transaction takes place, and should avoid paying both an origination fee and a yield spread premium.

Borrowers should ask questions before choosing their broker. Any broker should be able to clearly explain the types of mortgage products, including fixed-rate, adjustable-rate, interest-only, and negative amortization mortgages. Also, brokers should fully explain both the interest rate and the APR, as well as the discount points, origination fees, and closing costs.

Most loans fund within forty-five days. Borrowers will want to ask their broker about turnaround time, potential obstacles to closing, and how long after final approval the loan will fund. If a loan comes with a prepayment penalty, the broker should make that clear to the borrower. Also, a good broker will offer borrowers the chance to lock in their interest rate, so that borrowers are protected from potential rate hikes.

Borrowers should prepare for their appointment beforehand. Pulling a credit report, or checking a credit score, in advance, will give borrowers an idea of what they may qualify for, in terms of interest rates. However, borrowers should never disclose the interest rate that they want to their broker, to guarantee that the broker does shop for the lowest possible rate.

Because a broker works with fewer clients, borrowers receive more personal service. However, brokers work for lenders, and not for borrowers, and some disingenuous brokers have given the industry a sullied reputation. Borrowers should protect themselves by asking their broker to sign a fiduciary, which states that the broker agrees to work in the borrower\’s best interest.

A good broker will provide quotes from as many lenders as possible, saving borrowers the hassle of searching on their own, for the best loan. Even so, borrowers should not hesitate to contact multiple brokers, to shop around for the lowest possible interest rates. Honest mortgage brokers will be valuable allies in the home-buying process, and will help borrowers to save both time and money.

A reliable mortgage broker should be a property hunters\’ priority. Understanding fixed and variable rates can be made easier with the help of mortgage brokers

A reliable mortgage broker should be a property hunters\’ priority. Understanding fixed and variable rates can be made easier with the help of mortgage brokers.
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