Good arguments for using a Mortgage Broker
There are many arguments for using a mortgage broker if you are looking for the most advantageous mortgage rates and terms if you want a loan or to refinance a current one.
One of the key reasons is that the best mortgage brokers keep up-to-date with all of the major and also minor lending institutions. This means they can easily compare one mortgage offer with another to see which might be best suited to a particular client.
A broker can also advise on extra issues with a mortgage such as penalty fees for changing or loan arrangement or cancelling a fixed rate mortgage.
Mortgage Brokers – what are they?
It can be helpful to understand what a mortgage broker is and how they can help house buyers. In short they can arrange a mortgage for someone buying a house or refinancing an existing mortgage.
They do not provide the finance themselves but instead act as an intermediary between the buyer and a range of finance lenders. A mortgage broker will be independent of any finance house itself however the individual broker may be employed or work within a large broking firm. The company or individual broker is paid by way of commissions based on the size of the eventual loan. The commissions are paid by the lender and not by the borrower.
Assessing mortgage options available
Often special home loan deals are only available via a broker. There are many reasons for this but a broker will be able to introduce a number of clients rather than a lot of individual borrowers. This means the broker can pass on the benefits of the bulk finance package to their clients.
Conversely, a broker can negotiate better rates or terms than an individual might even with the borrower’s own bank due to the high volume of total business the broker arranges for the lender.
So going to a broker can easily give a borrower more and better options than talking to your own bank.
Reducing borrowing costs
Buying a house is an expensive project which can quickly get more expensive with all of the fees that can be incurred. There are valuation fees, documentation costs, application fees – it seems endless. Often a broker will arrange for the lender to forego some of those costs or at least offer a discount. Any savings will be very welcome with all of the other costs house buyers face.
Less wasted time
With so many mortgages available on the market, it is a long and arduous process to gather the information, analyse it and then come up with a short-list of potential lenders and specific offers that would suit you.
A mortgage broker has software tools which can drastically shorten this process to a few minutes. They might also have other tools which allow you to model different mortgages such as changing the rate, the length of the loan or the payment frequency. Using these programmes can help you find a better mortgage and in a matter of minutes rather than days.
Being the independent resource
A good mortgage broker will also be able to help you understand the technical details of house finance and also be able to handle the complex discussion between the buyer and lender. They will also ensure that the bank receives all the necessary documentation from the applicant which makes it easier for the loan officer to process the funding request. If your application is easy and complete it makes the banks job easier to help you. It is common for a bank to reject an application if the documents are not filled out correctly or parts are missing.
No hidden fees
These days a mortgage broker must declare to the borrower that they will be remunerated by the lender and also how much they will receive. This disclosure means that the borrower is fully aware of the process and also understands that the broker will not be paid until the mortgage has been signed and sealed.
A good mortgage broker has contacts with lots of lenders and takes time to keep current with the new mortgage offers that the banks make available. Unlike a bank loan officer, they are not tied to any particular loan package. This means they can recommend the loan that will be best for your situation.
Further they can negotiate improved rates or fees compared to an individual making a mortgage loan application.
And finally, their service comes free to the house buyer as they are paid a commission by the lending institution. So it makes sense to talk to a mortgage broker near you to reduce your borrowing costs and to save some of your house purchase fees.
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