When you’re in the process of buying a home, it can feel like there are an infinite number of details to keep track of.
Between mortgage rates, loan terms, closing costs, and so much more, the housing market is a pressure cooker of information.
Regardless of how prepared you think you are, buying a home can throw even the most organised person for a loop. That’s where a mortgage broker can come in handy.
A mortgage broker can help you navigate this tricky process by introducing you to various lenders and explaining all your financing options.
Here are four reasons why choosing a mortgage broker will make the process of buying a home much smoother.
You’ll have access to more lenders and loan options
Some buyers think they need to get a mortgage through their bank. Others feel like they have to go through a realtor to get a mortgage.
These are understandable assumptions, but they just aren’t true. What you need to do is get pre-approved for a mortgage. This is the easiest way to find out what you can afford and what your closing costs will be.
Once you have that information, you can shop around for a mortgage lender. This is especially important if you’re going to be putting less than 20% down on your home.
A down payment of 20% or more means you can get a “conventional” mortgage. This is the type of loan most buyers go with.
Once you get pre-approved, you can shop around for the best terms. That’s why you want to go with a mortgage broker: They have access to a wide range of lenders and loan options that you as a borrower don’t have access to.
A good broker will help you navigate the process of comparing lenders and choosing the best loan for you.
You’ll be an informed borrower
As we just discussed, the difference between conventional and government-backed loans can be huge.
The type of loan you choose could have a major impact on your life. For example, the interest rate on a conventional loan is usually higher. This means your payments will be higher as well.
In addition, the government-backed loan could result in a lower down payment. This could reduce the amount you have to save up for a down payment and help you avoid costly mistakes.
A broker can help you avoid costly mistakes
As we just mentioned, conventional loans often require higher down payments and monthly payments. These can be a burden on a first-time homebuyer who is just getting started.
A good broker will know the best options for first-time homebuyers. They can help you navigate the process of getting a low-down-payment loan and put you in touch with lenders who specialise in this type of financing.
They can also help you avoid common pitfalls. For example, some first-time homebuyers might be tempted to take out a loan with a lower monthly payment. However, if that loan has a higher interest rate, it could end up costing you more in the long run. A good broker can help steer you away from these kinds of mistakes.
Many loans now require a broker anyways
As we just mentioned, most loans for first-time homebuyers will have higher down payments and interest rates. For a long time, this meant that these kinds of borrowers had to go with a government-backed loan.
However, in recent years, the government has been tightening its lending criteria. This means that even experienced homebuyers with substantial down payments can’t get a government-backed loan. Instead, they have to go with a conventional loan.
Conventional loans are set by the market rather than government-backed guidelines. This means that mortgage rates and terms vary significantly. A good broker can help you navigate this process and find the best loan for you.
Conclusion…
For the most part, buyers will benefit from working with a mortgage broker. The mortgage process is complicated and varies depending on the type of loan you choose.
Depending on your situation, a broker can help you get a lower interest rate, a lower down payment, or access to a variety of different lender options.
Working with a broker is also a good way to make sure you understand the terms of your loan and avoid costly mistakes.
Moreover, many mortgage brokers will be able to offer personal advice on how to get the best mortgage for your situation. Even if you don’t end up using their services, finding a trusted mortgage broker will make your home buying process far more streamlined.
