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Main Benefits of Using a Mortgage Broker Versus Applying To a Bank Directly

Sailun Tires

Scouting houses, reviewing your credit and financing options, finding the right real estate agent, making offers, and negotiating, the process of buying a home can be daunting and expensive. Especially if you would be looking for a home purchasing in one of the hottest housing markets in the world, the popular Southern California. And that is precisely why most people who need to finance their home by obtaining a home mortgage from a lending institution are using a mortgage broker.

Reliable and professional mortgage lenders in southern California can sort and filter through mortgage options for you, pinpoint the best rates, or advise you to overcome unique borrowing challenges. Simply put, they help you make an informed and sound decision when seeking a home loan. Naturally, you also have the option of using a bank as a helping hand. However, if you want to know why we would recommend a broker instead of a bank, read this article and allow us to show you the benefits of using a mortgage broker when you need a home loan. 

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#1 Mortgage experts provide access to different lenders, loans, and rates that a traditional bank cannot

Mortgage brokers are licensed financial professionals who act as a middleman between you as a borrower and lenders. They have access to loans from various lenders such as mortgage banks, large commercial banks, community banks, credit unions, or other financial institutions. Since brokers are not tied to any of them, they can shop around on your behalf and find the most suitable opportunity for you. That is the number one difference and advantage mortgage brokers have over banks – variety. 

They offer a flexibility that can not be found by conventional financial institutions. Unlike them, a bank is limited to its products and uses its funds to originate loans.

Having the necessary knowledge of the entire mortgage market, combined with your individual circumstances, they can advise which lenders will consider your case and which will not. That means that they can shop not only for “tailor-maid” deals but also for ones with better rates.

#2 They are independent and “nonselective”

Considering they are professionals in their field, brokers offer absolute and unbiased advice. They are independent, so they assess all lenders based on merit and performance, selecting them based on your needs. In contrast, banks want to sell you their products. That means that they will not tell you, for example, that another bank has a limited-time rate special or that another has a promotion this month for free assessments. Mortgage brokers work for you! That is why they argue your cause and negotiate to get you the best rate.

Furthermore, unlike banks, brokers are more likely to find mortgages if you are self-employed or have a less-than-perfect credit history. The so-called bad credit mortgage brokers specialize in finding loans for people banks do not want to work with, making them available (and useful) for everyone.

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#3 Brokers handle the paperwork and interactions with lenders

Applicants are often unsure whether the lender will approve their application. Mortgage applications are extensive. They contain information including the borrower’s financial situation, employment history, and the property being considered for purchase. Brokers are also beneficial in this situation since they can support you throughout the entire application and settlement process.

Mortgage brokers manage critical paperwork while coordinating loan information with relevant parties, which makes them able to do many things for you. To start, they can arrange all your paperwork, share insights into how much home you can afford, source your pre-approval, or assist you if you opt to apply for government grants or incentives. Most importantly, they can head off problems. They understand lenders’ guidelines and have the chance to look at your information (and documentation) before it is sent to them. That means that if anything raises a red flag, you get a chance to iron it before it goes to the lender, increasing your chances of getting the loan.

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#4 Flexibility in choosing, meeting, and agreeing on fees

In contrast to banks, you are not fastened into working with a mortgage broker, which means that if you are unsatisfied at any point, you can change them. Also, they are more flexible with their appointment hours. That means you can arrange for a meeting, depending on your time and schedule. They are sometimes also willing to do after-hours or weekends, which can be a plus for full-time workers or borrowers with family commitments.

Mortgage broker rates may vary depending on the lender and the length of the mortgage. They usually range between 1% and 3%. Their fee will be discussed upfront before moving ahead with exploring available mortgages, leaving you space for negotiation. Most brokers earn money on commissions paid by the lender, which means they are giving you their services free of charge. 

In Conclusion

Before opting for a mortgage broker’s services, it would help if you spent time researching all your mortgage options. However, shopping for loans requires time and knowledge of where to look for products and guidance. Here the services of a mortgage broker are indispensable. They can save you time and effort. Having one can also make you feel more confident about making an informed decision about your mortgage.

Remember, if your application involves challenges, a broker who knows which lenders are most flexible can help. A good broker would know which lenders do not apply more stringent standards and are more likely to approve your application. Ultimately, mortgage brokers’ service is personal, needs-focused, and designed to provide results.


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