What Is a Mortgage Broker?
A mortgage broker is a third-party individual who helps connect borrowers to lenders and seeks out the best options for the borrower’s financial situation. They can help save a borrower time and effort during the mortgage application process.
Advantages of a Mortgage Broker
Working with experienced, knowledgeable Kelowna mortgage brokers can make your mortgage experience much less stressful.
A Mortgage Broker Saves You Time and Effort
Take the time to contact a couple of lenders directly to find out what mortgages are available for you. However, while it’s beneficial to research lenders on your own, your mortgage broker may regularly communicate with numerous lenders that they know and trust. Your broker can also steer you clear of any burdensome lenders with taxing terms buried in their contracts.
A Mortgage Broker May Have Better Connections
Some lenders work exclusively with specific mortgage brokers. They rely on these brokers to act as gatekeepers and provide them with suitable clients. With that in mind, some lenders may not be directly available for your calls, pushing you to go through brokers. The mortgage brokers may also get special rates from lenders depending on the volume of business they generate.
A Mortgage Broker May Help With Finances
Many different fees are involved in working with a new lender and taking on a new mortgage. These fees include origination, application, and appraisal fees. Some mortgage brokers manage to get lenders to waive some or all of these fees, which can save you a lot of money.
Disadvantages of a Mortgage Broker
A Broker’s Interests May Differ From Yours
Your goal in getting a mortgage is to find one with an affordable interest rate and low fees. However, mortgage brokers often receive compensation from the lender for bringing in clients. With the possibility of basing their payment on the mortgage amount, a broker’s goal may align more with getting you a mortgage that increases their compensation.
You May Owe a Broker Fee
Mortgage brokers get paid by you or your lender. If the lender covers the fee, you should look out later for expensive loans. The broker may steer you towards something you don’t want in order to get a larger commission. If you pay the fee, factor it into the mortgage costs before deciding how good a deal you’re getting.
A Broker May Not Source the Best Deal for You
Many home buyers assume brokers deliver better deals than they could get on their own, but this isn’t necessarily true. Some lenders offer home buyers the same terms and rates as mortgage brokers. It doesn’t hurt to look around on your own and see if your broker actually provides you with the best deal.
