Mortgage Brokers
The job of a mortgage broker is to match borrowers with lenders. If you are looking to purchase a property you will no doubt want to find the best mortgage deal, which is the mortgage plan that suits you and is affordable – see mortgage types. If you have a poor credit rating you will find it more difficult to gain access to the most competitive mortgages, and this is exactly the kind scenario mortgage brokers deal with on a daily basis.
Brokers often have access to many mortgages that cannot be found at traditional lenders, which is ideal for people with poor credit or people seeking business premises for example.
A mortgage broker has access to a broader range of mortgages than a bank. More....
The reason for this is straightforward; the bank clerk can only sell you the bank’s home loan products whereas the broker works on a freelance basis. And because the broker is independent, they can take your mortgage application and present it to any number of banks, depending on the size of their portfolio. It is not uncommon for a mortgage broker to have anything from 20 to 200 banks on their books.
Banks vs Mortgage Brokers
Borrowing from a bank has some advantages over using a broker. A broker may source your mortgage from an out of town lender who is not familiar with local issues, ie severe weather, earthquake hazards etc. Using an out of town mortgage lender has been known to slow the house buying process down, which can be frustrating for everyone involved.
The other advantage to using a local bank is the relationship you can develop with the employees. Having a good customer/bank relationship can be of enormous value, especially if you encounter some financial difficulties along the way. A mortgage broker may use a bank from a state which you never set foot in over the whole term of your mortgage.
Is a mortgage broker truly independent?
Good question. Some brokers are tied to a handful of banks because they earn good commission by consistently using those few lenders. Some mortgage brokers admit to using only a small number of banks and will tell you the reason is they have the best mortgages. This may be true, but if your mortgage broker is comparing mortgages from only a handful of lenders, you can save yourself the money and shop around yourself.
In any event, if you are keen to get the most competitive home loan it pays to shop around, do some research and visit many of the online banks as well as the traditional lending institutions. Check out the best mortgage deals on our comparison tables and apply online.
Make yourself at home in our Forum and find out what everyone else in America thinks about mortgage brokers. There is also our up-to-date News section for all the latest on personal finance. If you need help finding a provider or would like to review a company, please don’t go without checking out our A-Z directory.
