Dealing with all the paperwork required to get a mortgage can intimidate even the bravest. If you would rather avoid that, you could hire a mortgage broker that will help you throughout the entire process. In a second, you’ll learn why you should consider hiring a mortgage broker. Let’s go!
It is not hard to get lost among all the necessary documents, regulations, and deadlines. Getting a mortgage would be stressful enough, even if it wasn’t for all the chaos that you’ll have to deal with. If it is the first time you are getting a mortgage, and it probably is, you might not know whether you won’t encounter any problems paying it off later. The broker had encountered hundreds of clients throughout his career, and he knows what is reasonable, and what would be just too much.
Which lenders to choose?
According to The Mortgage Broker, the task of the broker is to work as a “middleman” between you and the banks or lenders. Why is it a good idea? Mortgage brokers have years of experience, which means that they’ll know which lender would suit you best, but also whether it is a good decision. You might not be able to pay a monthly rate offered by a particular bank, but perhaps another source of financing, another lender might agree to lower the monthly rates? You would need to spend long hours comparing different banks or private institutions, whereas the mortgage broker will know from experience which lender would be best for you. This way, you wouldn’t choose a lender that uses unfair practices. What’s more, certain lenders work only through mortgage brokers, which means that you wouldn’t be able to find them on your own.
Another reason why hiring a mortgage broker might be a good idea is that they have spent dozens of hours negotiating the final contract between their clients and the lenders. They might be able to persuade the other side to waive at least some of the fees or lower the monthly rate that you’ll have to pay. If you are not well-versed in this subject, you wouldn’t even know where to start. A mortgage broker, on the other hand, would know which parts of the contract he could try to change, but also which one would be non-negotiable.
Not all that glitters
Unfortunately, there are also downsides to hiring a mortgage broker. If a mortgage broker receives payment in the form of a commission, then it might be in his best interest to convince you to take out a higher mortgage. It means that a flat rate would be a much better idea. You should discuss this matter before you sign a contract so that you aren’t surprised at the end of the deal.
Although there are lenders who will do business only with mortgage brokers, and not private clients, there are those who won’t deal with mortgage brokers at all. If you don’t do your own research at all, you might miss better deals, to which mortgage brokers wouldn’t have access.
Is hiring a mortgage broker a good idea?
Ultimately, it should be a decision that you make on your own. If you think that you can handle the paperwork, and you don’t mind comparing different deals, then perhaps you don’t need additional help. If, on the other hand, you are somewhat intimidated by the number of documents that you’ll have to file, then hiring a broker might be a better choice. It would save you some stress, and most probably, you would end up with better terms of a contract. The experience of a broker means that he knows which mortgage would suit your needs best and whether you’ll be able to pay it off. You should remember, though, to pay him a flat rate or an hourly rate to avoid creating incentives that could cost you quite a lot.