Most people who purchase a home today will apply for a home mortgage to obtain the funds they need to make their purchase. Others who already own a home may consider refinancing their mortgage to obtain a lower monthly payment, to establish different terms so their loan can be paid off more quickly, or to recoup equity out of their home. When you make the decision to apply for a mortgage, you have the choice to apply directly to a lender for your mortgage or to work with a mortgage broker. While working with a broker is not without its fees, the benefits that a broker can provide may be well worth the fees you pay.

Shopping for the Best Loan Program

If you make the decision to work with a mortgage broker, the loan process will begin very similar to the process you would enjoy if you apply directly with a lender or bank. You will fill out a loan application, and your credit report will be pulled. A lender will use this information to prequalify you for a loan, but if you are not approved for prequalification, the process stops there. You must then go apply directly with another lender. A broker, however, will use the information you provide on the loan application as well as the information on your credit report and shop your loan around for you. Brokers are very familiar with the lending guidelines and parameters of various lenders, and often their industry expertise can be used to your advantage as they shop your loan to the top lenders best suited for your loan request. You generally will be provided with several different quotes to choose from.

The Loan Process

The benefits of using a mortgage broker go beyond simply providing you with ease in getting pre-approved for a loan and shopping for the most competitive rate. Throughout the loan process, a broker will work with you to ensure your loan moves smoothly through loan processing and loan underwriting. He or she will communicate with the lender to follow up on the status of the loan for you, and will follow up with you if additional documentation like pay stubs or tax returns are needed. A broker can also work with third party vendors like appraisers and property inspectors to ensure their reports get to the lender in a timely fashion. Without a broker, generally you would need to do all of this follow up work yourself.

The Fees

Each broker will charge fees for their services in different ways. Some may charge an up-front application fee to cover basic costs for their services as well as a credit report. It is also common to pay a broker fee at closing, which may equate to a flat dollar amount or a percentage of the loan amount. The fee may be able to be rolled into the loan, or you may have to pay it out of pocket. In some cases, the fee can be structured so that it is paid through the bank by adjusting the interest rate. Brokers will not work for free, but their fees as well as the structure of those fees may be negotiable.

In many cases, it does make sense to use the services of a mortgage broker when applying for a home mortgage. Consider the many benefits a broker can provide to your upcoming loan request, and then take time to shop for a broker who you have a good rapport with.

Our Calgary mortgage broker and Mortgage broker Edmonton firms are locally owned and operated, they have been helping Albertans access equity loans since 1993. Alberta Mortgage Funding Inc 51 Inglewood Drive, St. Albert, AB T8N 4E7 (780) 470-3000 ‎

Our Calgary mortgage broker and Mortgage broker Edmonton firms are locally owned and operated, they have been helping Albertans access equity loans since 1993. Alberta Mortgage Funding Inc 51 Inglewood Drive, St.Albert, AB T8N 4E7 (780) 470-3000 . http://www.albertafunding.com

Author Bio: Our Calgary mortgage broker and Mortgage broker Edmonton firms are locally owned and operated, they have been helping Albertans access equity loans since 1993. Alberta Mortgage Funding Inc 51 Inglewood Drive, St. Albert, AB T8N 4E7 (780) 470-3000 ‎

Category: Finances
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