Choosing the Right Mortgage Broker
Choosing the right mortgage broker can be a huge advantage to you in the purchase of your new home. There are a couple different types that you need to know when going into this process of home-buying.
The first is a bank, or a ‘lender.’ When you go into the back, ie: Washington Mutual or Wells Fargo, etc, you can get a loan from them. And sometimes, they have a great deal and it’s a great way to go. You may often get special rates and promotions that they are advertising and it can be quite beneficial. As a buyer, you will still have to pay approximately 1% of the loan amount to the lender as their ‘fee’ – this is called a ‘point’.
Here is the disadvantage to using your local bank as your lender. Every lender has certain parameters that their borrower has to fit into. Sometimes that’s a credit score, other times it employment history, and it could be any number of requirements. You have to fit into their little ‘box’ and then they give you the rates they can. But when you fall outside of their parameters, guess what happens – your interest rate goes up because you become more of a liability than their ideal borrower. They’ll probably still lend you money, but you might pay more for it.
The other option is to use a mortgage broker. These are people that don’t work for a specific bank. They have the ability to get loans for you from 100 different banks. They can still go to WaMu or Wells Fargo, but they can also go to the people that you didn’t even know existed – like Decision One, etc. You’ll most likely still pay your mortgage broker that 1%, but your options are much stronger.
Here’s where this type comes in handy. They might be able to find you a much better interest rate than you could get at your local bank. And if you don’t fit into the ‘box’ that the banks usually like to see, they can go to a different bank and get money from them and still get you that better interest rate.
Obviously, its much more complicated than that when you dig into it, but if you’re thinking about buying a home or re-financing your existing loan, consider talking to a mortgage broker and see if they can get you a better rate than your local bank. If they can’t, it’s better to have tried than not.
If I can be of any help to you or someone you know in purchasing or selling a home, please let me know. I will be happy to help out however I can.
To search listings, view current market information, and many other resources - visit www.soderlundhomes.com.
Good luck!
Aaron
The first is a bank, or a ‘lender.’ When you go into the back, ie: Washington Mutual or Wells Fargo, etc, you can get a loan from them. And sometimes, they have a great deal and it’s a great way to go. You may often get special rates and promotions that they are advertising and it can be quite beneficial. As a buyer, you will still have to pay approximately 1% of the loan amount to the lender as their ‘fee’ – this is called a ‘point’.
Here is the disadvantage to using your local bank as your lender. Every lender has certain parameters that their borrower has to fit into. Sometimes that’s a credit score, other times it employment history, and it could be any number of requirements. You have to fit into their little ‘box’ and then they give you the rates they can. But when you fall outside of their parameters, guess what happens – your interest rate goes up because you become more of a liability than their ideal borrower. They’ll probably still lend you money, but you might pay more for it.
The other option is to use a mortgage broker. These are people that don’t work for a specific bank. They have the ability to get loans for you from 100 different banks. They can still go to WaMu or Wells Fargo, but they can also go to the people that you didn’t even know existed – like Decision One, etc. You’ll most likely still pay your mortgage broker that 1%, but your options are much stronger.
Here’s where this type comes in handy. They might be able to find you a much better interest rate than you could get at your local bank. And if you don’t fit into the ‘box’ that the banks usually like to see, they can go to a different bank and get money from them and still get you that better interest rate.
Obviously, its much more complicated than that when you dig into it, but if you’re thinking about buying a home or re-financing your existing loan, consider talking to a mortgage broker and see if they can get you a better rate than your local bank. If they can’t, it’s better to have tried than not.
If I can be of any help to you or someone you know in purchasing or selling a home, please let me know. I will be happy to help out however I can.
To search listings, view current market information, and many other resources - visit www.soderlundhomes.com.
Good luck!
Aaron
posted by Soderulnd Homes at
3:39 PM
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