Should You Hire A Mortgage Broker Or Do It Yourself?

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When you are ready to buy a home, you might be wondering whether you should try shopping for a mortgage on your own or seek help from a mortgage broker. A mortgage broker can be very helpful in the process, especially for those inexperienced in buying a home. Here’s everything you need to know about the pros and cons of using a mortgage broker.

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How easy is it to shop around and get a mortgage on your own?

If you’ve never bought a mortgage before, you might be wondering if this is a task you should tackle on your own.

“In today’s modern age, it’s easy to shop around and get a mortgage.
online, ”said Kevin Leibowitz, a mortgage broker Grayton Mortgage. “There are a number of lenders online that make this easy.
But, sometimes these lenders may not offer the best deal (i.e.
combination of closing costs and rate).

Leibowitz went on to say that he finds that most people looking for a mortgage need help figuring out what’s best for them, which a mortgage broker can help. “A house is the most expensive item they will ever buy, and buyers would like to be reassured in the process as well as to have their understanding validated and possibly corrected,” he said.

Khari Washington, broker and owner of 1st United Realty & Mortgage, agrees that it can be easy to shop for a mortgage on your own, but you need to have some knowledge to do so.

“Buying a mortgage is easy if your income is easy to verify, your credit is
well and you know how to analyze the closing cost structure, ”he said. “
Borrowers need to know how many points they are paying for a rate so that
they don’t take a lower rate than a higher price, which makes the rate higher
expensive than a competitor with a higher rate.

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What are the advantages of working with a mortgage broker?

One of the benefits of working with a mortgage broker is that you may be able to save money.

“Working with a mortgage broker can lead to a reduction in standard lender fees,” said Shad Elia, CEO of Home buyers in New England. “Borrowers may experience less funding or
set-up costs resulting from the assessment of the loan provider. It’s not
still the case, however. When working with a broker, it is essential to
request a breakdown of costs.

Another benefit is that you can reduce the amount of paperwork you would potentially have to complete.

“Homebuyers who often take the time to look for the best mortgage
find themselves faced with mountains of paperwork to complete, ”Elia said. “Those
who do business with a mortgage broker, on the other hand, will only have to
submit a single application for a new loan, rather than completing several
requests and provide multiple copies of the financial statements to
various lenders.

“A mortgage broker will be able to purchase a loan properly, looking at the true cost of the rate and finding the truly cheapest provider to work with,” Washington said. “Plus, mortgage brokers have lenders who can help fund troubled borrowers. Mortgage brokers are also generally a bit quicker in getting funded loans. “

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What are the disadvantages of working with a mortgage broker?

While he’s probably not a deal breaker for most people, Jeffrey Loyd, director of Mortgage acuity pointed out the following: “You are unlikely to have your mortgage at the same bank where your checking and savings accounts are located.”

And Leibowitz pointed out a few other drawbacks.

“The main downside is that mortgage brokers might not be as competitive
on a few types of products, ”Leibowitz said. “Namely, jumbo mortgages and interest-only mortgages. These are called better banking products. In addition, given that a
mortgage broker is not a custodian, we cannot offer a rate advantage for
make deposits. For example, a bank might be able to reduce the rate if the borrower is able to make $ X in deposits.

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Who Should Consider Working With A Mortgage Broker?

“All borrowers should work with a mortgage broker because there is nothing
to lose and a lot to gain, ”said Ross Taylor, mortgage broker and owner of Ross Taylor Mortgages. “In particular, there are certain borrowers who
would not be approved by their bank, and they need access to a mortgage
lenders who are not necessarily banks. In such cases, working with a
mortgage broker is essential to be approved. They can be borrowers
with damaged credit or hard to verify income.

“A mortgage broker is ideal for those who want to spend more time with their loan officer to get their questions answered and their concerns addressed: first-time homebuyers, buyers with less than 20% down payment, the self-employed or people with complex sources of income. , and real estate investors – are all great clients for mortgage brokers, ”Loyd said.

“I find that most borrowers work best with a mortgage broker,” Washington said. “Different mortgage brokers are better with different loan programs, and brokers seem to work faster, have fewer layering requirements, and lower rates. “

However, if you have excellent credit, prefer to have your mortgage with the same institution where you bank and think you can get the best rate from your bank, take Taylor’s advice:
your bank of many years is where your mortgage belongs, ask them first
their best mortgage deal. Next, ask your mortgage broker if she [or he] can do
better. Most of the time, the answer is yes!

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About the Author

Cynthia Measom is a personal finance writer and writer with over 12 years of collective experience. His articles have appeared in MSN, Aol, Yahoo Finance, INSIDER, Houston Chronicle, The Seattle Times, and The Network Journal. She attended the University of Texas at Austin and obtained a Bachelor of Arts in English.

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