Here’s why working with a mortgage broker is better

Embarking on the journey of home ownership marks one of life's most significant financial milestones. Ensuring the right team accompanies you in this endeavor is crucial. Amidst the various key players in the home-buying process, obtaining a mortgage stands out as a pivotal step in setting expectations and crafting a sustainable budget for monthly payments. Securing a pre-approval for a mortgage becomes the cornerstone, enabling homeowners to target their dream homes with confidence.

Navigating the selection of the right financial expert need not be a stress-inducing task. A fundamental question arises for borrowers:

"Should I work with a mortgage broker, lender, or banker?"

Having traversed all three roles in my career, I assert with confidence that the optimal choice consistently leans towards working with a mortgage broker.

Defining the Mortgage Broker Role

Mortgage brokers emerge as adept home finance professionals who function as diligent personal shoppers for their clients. Unlike representatives of banks or credit unions, brokers don't utilize their institution's funds to originate mortgage loans. Instead, they dedicate themselves to understanding their clients' aspirations, evaluating suitable loan programs aligned with those goals, and identifying optimal solutions. Picture brokers as personal shoppers attuned to your preferences, not mere transaction facilitators. As I often emphasize, "I'm a Mortgage Advisor, not a Mortgage Order Taker."

Advantages of Choosing a Mortgage Broker

Access to a Diverse Pool of Lenders: Mortgage brokers collaborate with numerous lenders, providing access to a broader spectrum of household loan products than direct interactions with banks or credit unions would offer.

Expert Guidance: A mortgage broker, being a highly-trained professional, offers expert guidance throughout the home loan process. They help clients comprehend various home loan types and furnish personalized advice based on individual financial situations.

Time and Hassle Savings: Working with a mortgage broker streamlines the process, sparing clients from the arduous task of filling multiple loan applications and dealing with numerous lenders. The broker handles these intricacies on behalf of the borrower.

Negotiating Power: Mortgage brokers wield negotiating power with lenders, leveraging their experience to secure favorable loan terms and rates on behalf of clients. Wholesale lenders vie for their business, enhancing the negotiating position.

Cost Savings: Brokers aid in saving money by identifying the best loan products and rates available, translating into significant savings over the home loan's lifespan.

Personalized Service: A mortgage broker offers personalized service, taking the time to comprehend each client's unique financial situation and goals. This ensures the identification of a loan product aligning with individual needs.

Higher Approval Chances: Due to collaborations with multiple lenders, mortgage brokers often secure loan products for clients who might face rejection from their banks.

Transparency: Mortgage brokers provide comprehensive information, explaining loan terms and conditions in plain language, fostering informed decision-making.

Follow-up Support: Brokers continue to provide support and advice throughout the home loan's life, assisting clients in navigating changes in their financial situations.

Peace of Mind: The greatest benefit lies in the peace of mind that accompanies having an experienced professional guiding the home loan process, ensuring the best possible loan product and rate.

It's essential to note that not all mortgage brokers are identical. Conducting thorough research, asking questions, and seeking referrals are crucial steps before finalizing a partnership.

Dispelling Mortgage Broker Myths

Myth #1: Lack of Underwriting Control: Contrary to the misconception that mortgage brokers lack control over the underwriting process, they work directly with end investors to underwrite files. This allows brokers the flexibility to choose where to send loans and hold underwriters accountable for swift clearance.

Myth #2: Longer Processing Time: Data from the January 2019 Ellie Mae Mortgage Origination Survey indicates that mortgage brokers boast an average closing time of 21 days, significantly quicker than the 45-day average for major banks and lenders. The misconception of longer processing times is unfounded.

Myth #3: Higher Costs: On the contrary, mortgage brokers often secure lower rates for clients. The ability to access wholesale rates and maintain lower overheads allows brokers to pass on substantial savings to borrowers.

In Conclusion

As mortgage rates experience an upward trend, consumer awareness of exorbitant rates and fees charged by large retail lenders and banks is on the rise. Seeking a second quote from a mortgage broker could potentially save clients thousands upfront and tens of thousands over the loan's life by securing a lower interest rate. For those desiring a genuine "mortgage advisor" armed with access to a myriad of wholesale lenders and solutions tailored to diverse scenarios, I extend a welcoming call. Your journey is in capable hands, and I'm here to assist you throughout.