After locating your ideal home, your attention now switches to find the best mortgage so that you can buy that home. One way to make sure the new home becomes yours is to work with a mortgage broker throughout the entire process.
Perhaps you have already heard of mortgage brokers from family or friends that have previously taken out mortgages in order to buy their homes.
Even so you may still be wondering what a mortgage broker does, and what they can do from the mortgage advisors who work for banks.
To assist you in understanding what mortgage brokers do, and how it makes taking out a mortgage here are 5 frequently asked questions and answers to them.
1. What is a mortgage broker?
A mortgage broker acts as a go between that uses links ith several different banks in order to find you the best deal in terms of interest rates. Mortgage brokers have good links with several banks so that they can assist all of their customers.
Mortgage brokers are qualified and licensed financial experts who process and gather mortgage claims as their profession. They will check your credit history and all relevant documents in order to apply for mortgages on your behalf.
As soon as you have agreed to apply for a specific loan, your mortgage broker will coordinate with the lender, the real estate agency, and the titleholder until the process is completed by you moving into the property.
2. How is a mortgage broker paid?
Usually, mortgage brokers are paid by the borrower or the lender, but never by both. Generally, they will receive a fee worth between 0.50% and 2.75% of the total mortgage loan.
Borrowers can decide to pay the mortgage broker fee themselves, and that is known as borrower paid compensation.
In the coastal areas and the most popular cities like New York and Los Angeles the fee tends to be 0.50%. An upper limit of 2.75% was introduced by the federal government in order to promote sustainable mortgages.
The limit for fees and points that brokers can charge is 3% in order to deter the irresponsible mortgage lending, which led to the last housing crash.
3. What makes a mortgage broker different from a loan officer?
Basically a loan officer works for, and is paid for by a single bank or lender, whereas a mortgage broker tends to work with several banks. Brokers are then paid by the lender that offers the loan (unless paid by the borrower).
4. Is a mortgage broker right for me?
A mortgage broker is the right option for many home buyers. Mortgage brokers will save you both time and money because of their links with several lenders.
As mortgage brokers apply for loans for you, they will work out the best rates, costs and over all deal for you.
Aside from money, a mortgage broker will also save you time by smoothing out the process and making sure that the lenders, solicitors, and the real estate agents do everything right and on time. They will shorten the time it take you to move into your new home.
Mortgage brokers just like lenders charge different fees, so compare fees before picking a broker. All brokers will save you time, and some will cost less than others.
Compare the interest rates and fees charged by different lenders, estate agents and mortgage brokers. Such comparisons could save you substantial amounts of money on possibly the most expensive item you will ever buy.
5. How do I chorse a mortgage broker?
A good method for chosing a mortgage broker is to seek advise from family and friends if they have used any brokers recently. Make sure that whoever is offering advise has used the service themselves fairly recently.
Ask for advise from your real estate agent, chances are high that they have mortgage brokers who they prefer to deal with. Your agent will trust some brokers more than others and recommend their favorite ones to you. Remember you can still pick another broker, you do not have to go with their recommendation.
Do not go with the first broker you see details for, or the cheapest one. Instead interview at least three mortgage brokers to find the one you think will deliver you the best service.
You can also check their license to see if they are in good standing with the state licensing authority. Online review and also the Better Business Bureau can provide useful reviews and information about the good or bad reputations of St. Louis mortgage companies.