Mortgage Brokers: The Full Service Option
Working with a mortgage broker is similar to the relationship you might have working with a real estate agent. They’re able to shop around with a variety of different lenders, including banks and private lenders, to find you the best rates and terms.
Your mortgage broker will then come back to you and tell you what they were able to find available, and work with you to decide which is the most attractive offer. Mortgage brokers are typically paid a commission by the lender once the loan has been approved, so there’s no extra cost to you, and you know they’re truly motivated to bring you an attractive deal!
Mortgage brokers sometimes receive volume discounts from lenders they work with often, and they’re able to pass that savings on to you, which means lower rates and fees. They also have the advantage of saving you time on paperwork, since they’re able to take your application for you to many different lenders. Finally, mortgage brokers do the negotiation for you that you’d normally be responsible for doing with the bank.
The disadvantage to using mortgage brokers is that you may not have the same pre-existing relationship with a mortgage broker that you have with a bank, and you may not get the same rates that their repeat customers get. Still, the benefits of a mortgage broker can often be worth it, and you shouldn’t underestimate the value of having a professional negotiating for you.
One final note on mortgage brokers is that they’re often the best choice for people with poor credit, or with a bad mark on an otherwise good history. Mortgage brokers have more access to lenders who specialize in people who are a higher credit risk, and they’ll also be able to tell you which lenders will or won’t consider your application based on your circumstances.