So, you are finally at that point where you have narrowed down the search to finding your dream home and now, you are at that crucial point where you are looking for a mortgage to get those keys in your hand. Let’s face it, everyone has a dream house in mind. A place where they want to grow old in. A place where they see themselves raising a family. However, the main thing that stands between that dream and the reality is the financing process.
One of the most popular ways to manoeuvre this journey is working with a mortgage broker who leads you through the lending process. In this article, we are going to look at five facts about working with a home loan broker.
What is a mortgage broker?
A mortgage broker is a licensed and regulated financial professional who works as a middleman to find mortgage lenders with competitive interest rates that best suit your needs as a borrower. The brokers are usually involved in a lot of legwork as they gather and compile documents from the potential borrower which are used in pulling your credit history and verifying your income source.
How is a mortgage broker paid?
Home loan brokers are usually paid by lenders and in some rare occasions, the borrowers. However, it should be noted that they are never paid by both at the same time. Mortgage brokers usually work on commission, they usually get a compensation percentage based on the loan amount. Therefore, the higher the loan amount, the higher the commission earned. The competitiveness and home prices in your local market will vary, click here for more information about finding home loans from competitive home loan brokers around Melbourne.
What is the difference between mortgage brokers and loan officers?
Many at times, people use the terms mortgage brokers and loan officers interchangeably while they should not. Loan officers are usually employed by the lenders and are salaried while mortgage brokers work independently. As mentioned before, the broker fees are commission based.
Is a mortgage broker the right fit for me?
A mortgage broker acts in your behalf applying for loans with different lenders. In doing so, they shop for the most competitive rates and negotiate the terms of your loan. In addition to all this, you save a lot of time by using a broker as you can still be able to handle your usual duties while the broker does the leg work as well as the back and forth communication needed to underwrite the loan and move the transaction along.
How do I choose a mortgage broker?
It goes without saying that the best way to get a mortgage broker that is right for you is to work with one that has worked with people you know. Referrals remain to be the best basis to make your decisions as your friends and family will have first-hand experience dealing with the broker you have chosen. If you live around Melbourne then I recommend checking out Mortgage Corp who are mortgage and home loan brokers in Melbourne who I’ve had a great experience with, you can find their website here. Real estate agents are also great sources for referrals. You can ask your agent for the names of brokers they have worked with before and have complete trust on them. Some real estate companies offer an in-house mortgage broker as part of their service. However, it is important to note that you are not obliged to use the in-house broker your real estate firm has.