Getting a mortgage is one of the most important steps in the life of any person, a step that needs to be performed with care. One of the crucial things you need to take into account is whom you are contracting the loan from. One of the main options you have is either a mortgage broker or a bank. Both come with advantages and disadvantages, so you nee to be aware of both before taking into account any of the two options.
Despite the fact that mortgage brokers have been around for quite a while, people are still weary to work such an important loan from them because in the past some of these brokers added hidden costs that increased the overall cost of the loan, something that was fixed recently with a law specifically created for this alone. Mortgage brokers offer homeowners more choices and more education than you would typically see at a bank.
Many people with non-traditional circumstances also benefit from working with a mortgage broker. People with mediocre credit or self employed people may find a mortgage broker the better option when it comes to getting approved for a mortgage.
The mortgage broker is basically the middleman. He won’t loan you the money, instead he will find the best loaner that you need at an accessible price. This can be either a commercial bank, community bank, credit union, or even a mortgage bank. Some of the most important banks in the country are Wells Fargo, Bank of America and JPMorgan Chase. In Canada, you have Toronto Dominion, RBC, Scotia and BMO as some fo the major national banks. One of the main advantages of a mortgage broker is that is offers you a wide range of variety when compared to the bank, meaning that you have access to a wide range of services from multiple lenders, and you, as a client, only need to select the one that you want. This makes the overall experience a lot more convenient, something that we definitely want.
On top of that, as a borrower that contacts mortgage brokers you will save a lot of time because the broker will do whatever it takes to fin the best deal for you, according to your own parameters. Brokers also handle the paperwork and meetings with the lenders, so all you need to do is sign the papers and the money will be delivered to you as fast as possible. This surely makes the service very convenient and it’s specifically created to help busy lenders.
The banks on the other hand are the ones in control because they make the decision of lending the money. If a borrower is a longtime client of a bank then he might be able to receive some favorable terms when it come to contracting a loan. Getting the loan using the services of the broker means that you need to pay a fee, while contacting the bank directly will remove that fee. Remember that in the end the bank is the one that sets the interest rate, so the broker is basically a middleman that will help you find the best deal without worrying. However, this comes with a cost.
To sum up, you need to figure out how much time you have to speak with the lenders and take care of the paperwork. If you can do that on your own, then the services of a mortgage broker are not required, but if don’t have the time to do that, then the broker might be a good option. It’s a good idea to find out the fees first, so you won’t end up with unpleasant surprises.