When Should I See a Mortgage Broker?
There’s a maze of mortage options in the financial world. Mortgage brokers: they’re experienced professionals with the tools you need to get an excellent mortgage. Hiring one may seem like a no-brainer to some people, while to others, it may appear a little risky. Still, you’ll occasionally encounter that in-the-middle homebuyer. Someone stuck on the eternal question: to broker or not to broker?
Today, we’ll be discussing the advantages and disadvantages of hiring a broker. We’ll also be going over who needs a broker most and who can probably get away scot-free. So, strap on your reading caps- we’re about to dump a whole lot of useful knowledge.
How Much Does a Mortgage Broker Cost?
The first question on anyone’s mind when it comes to buying a home is: how much? If you’re trying to start a family and build a home, your essential concern will always be money. Saving up and getting some overhead is a great way to stay stable for the future.
So, you’re probably wondering- how much will it cost to hire a mortgage broker? The answer? It depends on how much money you need and how much you get when all’s said and done.
Mortgage brokers are great – there’s no question about that. However, they can also get a little pricey. Mortgage brokers are usually paid as a percentage of the loan secured. So, if you get a $100,000 loan with a 1% fee to the broker, you’ll be paying them $1,000 for their services.
Does it make you want to go back to school to become a mortgage broker?
Watch Out for Hidden Fees
While many brokers are trustworthy and intelligent, some are just out there for the profit. It’s a sad fact, but there are some people and businesses in this world who will do anything to make an extra buck.
Some brokers hide fees in the fine print. If you’re looking for a decent broker, you’re going to want to do your research. Read their contracts all the way through, and ask for some time to think about it.
Advantages of Hiring a Mortgage Broker
Without further ado, let’s get into some of the reasons you might want to hire a broker.
1. They Have Experience in the Field
A broker gains you such an advantage because they use their boundless knowledge of the options in the market to get good deals. Brokers spend most of their working hours just searching for the mortgage deals. It would make sense that they’d know where to find the best ones.
Not to mention, brokers are in touch with the market. They might know about new, better mortgages coming up and be able to secure you one.
2. They Can Save You Money in Unexpected Ways
What people worry about most when finding a mortgage is interest. How am I going to pay that every month? Will they be able to jack it up? What’s a good interest and a bad interest?
But what they often forget is alternative fees. Many mortgages come along with hefty initial fees just for the privilege of using them. Brokers, with a little bit of smooth-talking, tend to try and get these fees waived. If they’re successful, they could save you hundreds or thousands on a stellar loan.
3. They Can Work with Your Financial Situation
If you’re in a unique spot financially- perhaps you live off an inheritance or have a non-w2 form of income- brokers can help. Different financial situations will warrant different kinds of loans. Finding out what type of loan your finances allow for can be a real drag if you don’t know the lingo.
Mortgage brokers do that leg work for you, getting everything in place to secure your loan. If you have a weird financial situation, a broker is your go-to strategy for landing the best possible loan.
4. They Can Handle Documentation
This goes back to all those weird financial situations we talked about. If you have trouble filing your own taxes, you’re going to have a bear of a time finding a mortgage- trust us.
For most of us, gathering the documentation for a trip to the DMV can be as exhausting as running a marathon. Imagine gathering information on quarterly taxes, inheritances, and all the other alternative forms of income out there.
A broker takes this out of the equation- for you at least. They do all the dirty work to make sure you have your documents together and can get a stable loan.
Disadvantages to Hiring a Mortgage Broker
While hiring a mortgage broker can get you all the experience and expertise you need to secure a loan, it can also go wrong. Like anything else, there are some disadvantages to hiring a broker.
Like any businessmen, brokers are profit-seeking. They may be beholden to interests beyond you, and they may not or may not have your best interests in mind.
Since the 2008 financial crisis, the legitimacy of the brokerage industry has been a bit in doubt. From sketchy practices to willful deception, brokers have gained a bit of a bad wrap. Make sure you know a broker before you hire.
Brokers Are Losing Credibility
Some banks have found that loans negotiated through brokers tend to default more often. For this reason, some banks refuse to work with brokers. To avoid this issue, you might want to take the brokering burden on yourself.
Who Needs a Mortgage Broker?
Now that you’ve got all that information under your belt, you should be able to answer the question yourself. However, if you’re still confused, here’s the shorthand answer to guide you through the process:
If you’re confident in your ability to navigate the complicated world of mortgages and negotiate a good deal, take the process on yourself. If you’re not, and you have the money to do it, hire a broker. For questions about refinancing or getting a new mortgage visit www.imortgagebrokerbrisbane.com.au and contact the team.
Some things that might affect your confidence would be unfamiliarity with terms, forms of alternative income, and lack of experience in the market. These can all be overcome with extensive research, though. Make an educated decision about whether or not you can hire a broker.