Best Chance At The Lower Rate
Perhaps the biggest benefit to dealing with a broker is the fact that they have access to dozens of mortgage lenders. This greatly increases your chances of getting the best possible rate at any given time. Its true that if your credit is in good shape, youre going to be offered a competitive rate at your own bank, but if you can shave even 20 or 30 basis points off of that rate by going through a broker, why not explore that option.
Guide To International Mortgage Lenders
An international mortgage is any mortgage taken out against a property in a country different to the one you live in. You may want an international mortgage in a couple of different situations:
- Youre a US citizen living in the US and investing in property overseas
- Youre a US citizen living abroad and investing in property back home
This guide to international mortgage lenders for US citizens covers all you need to know. Well also introduce Wise as a good option to send money internationally when you buy property abroad.
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What Are The Pros Of Working With A Direct Lender
Direct lenders can make funding decisions quickly since they control their own lending criteria. This allows them greater control over which customers get the funds theyâre seeking. Another advantage is that many large direct mortgage lenders are licensed nationwide, which means they can help buyers from any state. When a borrower is looking to buy a home in another state, direct lenders can be a great source of help.
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The Pros And Cons Of Going Directly To A Bank
- Specialized knowledge. Going through a bank loan officer gives you access to the very best deals at the bank or lender you choose to work with. Bank loan officers are also experienced in working with their banks policies.
- Discounts for existing customers. If youre already a customer, they can often structure a loan to work with other bank-provided products you already have.
- Direct customer service. By dealing directly with your lender, any questions you have can be addressed without taking the time to go through an intermediary.
- Limited selection. A bank loan officer only has access to the loans offered by the bank or lender they work for, which can restrict your mortgage options.
- Tougher requirements. If youre self-employed or have bad credit, many banks may not approve your application. A broker will help you find a lender that can.
Brokers Give You More Choice
Banks can only offer you their own products and adhere to their own lending policies which means youre potentially missing out on a home loan that is better suited to your needs.
Lets say, for example, that you apply for a loan with the and you dont quite fit their lending policy.
The bank loan officer doesnt necessarily know that you dont quite qualify but they convince you to apply for the home loan anyway. Then again, they might know you dont qualify at all!
The staff member is pretty much hoping that the deal will go through which means a lot of Australians get declined and miss out on buying their dream home.
A broker, on the other hand, has and many products to choose from so they will only apply with a lender that will likely approve your loan.
Youre saving time and hassle and can avoid getting unnecessary credit enquiries listed on your credit file when you apply for home loans that you dont qualify for.
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How Do Mortgage Brokers Get Paid
Mortgage brokers are paid by whatever lending institution or bank they end up getting you a mortgage with. The mortgage broker acts as a salesperson or liaison for dozens of different lenders and they get a commission from those lenders when they sell one of their products.
The big banks and lenders can afford to do this, because by working with mortgage brokers, they need to hire fewer staff who work directly for them selling mortgages. As a bonus, they only have to pay the mortgage brokers when someone signs a mortgage.
Another bonus for the banks and lenders, is that they can have mortgage brokers as partners nationwide, giving them much more reach without having to build additional brick and mortar banks and offices.
The Cost Of Using A Mortgage Broker
In return for doing all that, the broker charges a fee, which is usually a percentage of the loan amount. The buyer or the lender can pay this.
If the broker expects the buyer to pay, they might offer what’s called a lender credit, which essentially builds the fee into the loan.
That way, you pay nothing out of pocket.
All of that sounded great to me when I was ready to buy again.
I was working on growing my freelancing business and raising two kids and I just didn’t have time to get bogged down in the details of finding a mortgage.
So I chose to go with a broker. But things didn’t go as smoothly as I’d planned.
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What Does A Mortgage Broker Do Your Step
Dealing with banks can be super stressful when refinancing your mortgage, getting a new one, or accessing the equity in your home. So, its only natural youll want a team of trusted professionals on your side. Hiring an expert real estate agent and lawyer are important, but not to be overlooked is hiring a top-notch mortgage broker.
What does a mortgage broker do? A mortgage broker is a licensed individual who helps you select the mortgage product that best suits your financing needs. They do this by comparing mortgage products offered by a variety of lenders. A mortgage broker acts as the quarterback for your financing, passing the ball between you, the borrower, and the lender.
To be clear, mortgage brokers do much more than help you get a simple mortgage on your home. They can help you access equity, refinance current properties, purchase investment properties, and a myriad of other tasks to support your financial well-being.
When you go to the bank, the bank can only offer you the products and services it has available. A bank isnt likely to tell you to go down the street to its competitor who offers a mortgage product better suited to your needs. Unlike a bank, a mortgage broker often has relationships with dozens of lenders , making his chances that much better of finding a lender with the best mortgage for you.
Now that you have a better understanding of what does a mortgage broker do, lets look at how a typical mortgage application looks.
How Mortgage Brokers Finance Mortgages
Mortgage brokers will assist you in the application process, from pre-approval to home appraisal however, it is important to note they are an origination service. A financial institution, not a mortgage broker, will provide and service your loan. The bank or lender will collect payments and provide customer service after the closing however you can also reach out to your mortgage broker to help you throughout the life of your mortgage.
Many of the major Canadian banks sell through mortgage brokers including TD Bank, Scotiabank, CIBC and ING. In a recent survey conducted on our website, we asked our participating mortgage brokers which three lenders they work with the most. The most popular lenders were as follows:
- 1. TD Bank
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What About A Bank
Yes, you can also take out a mortgage through a bank. In fact, if you have a good, long-standing relationship with your bank, they may lower your closing costs and interest rate. As with direct lenders and credit unions, banks process their mortgages in-house.
But be careful with some of the big banks. Though they offer a wide variety of financial servicesnot just mortgagesthey may not give you the best customer service.
What Is A Mortgage Broker How To Get A Better Mortgage Without Your Bank
It seems that in Canada, mortgage brokers have never been more popular with home buyers. According to CMHC, almost half of Canadian homebuyers got their mortgage through a mortgage broker in 2019. Interestingly, almost 70% of them say their number one reason for doing so was to get a better interest rate, yet there are several reasons that it may be in your best interest to deal with a broker next time you need a mortgage.
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Pros Of Using A Mortgage Broker
Brokers are mortgage experts. They know the market, follow trends, and know which banks and other institutions offer which mortgages products. Theyll also know which lenders are offering discounts or deals on home loans.
More importantly, mortgage brokers can save borrowers time getting a mortgage loan. A smart broker can identify the most appropriate lender for your specific circumstances and know which mortgages will be most appropriate. Mortgage brokers also handle the hassle of paperwork and interaction with lenders, which can help relieve stress from the loan process.
This saving of time, work, and stress is a big factor for many individuals who use a mortgage broker. Some brokers develop personal and professional relationships with lenders, which may accelerate the application process.
You can meet with a local mortgage broker face to face, in his brick-and-mortar office, and get your questions answered. That may be more reassuring than talking to a different person every time you contact an online lender.
However, these relationships between broker and mortgage company arent always a good thing.
Mortgage Broker Or Lender Which Is Better For You
Youre ready to apply for a mortgage loan and begin the hunt for your dream home. Now you have to decide between the two main providers of mortgage financing: mortgage brokers or mortgage lenders, the latter including both banks and other direct lenders.
The big difference between the two? Mortgage banks and non-bank direct lenders rely on their own money to fund their mortgages. When you apply for a mortgage loan at one of these lenders, you’ll work with that company’s employees, everyone from the loan officer who takes your application to the underwriters who verify that you can afford a monthly mortgage payment.
Mortgage brokers act a bit like insurance brokers. They don’t work with one company. Instead, they work with a wide range of wholesale lenders. This means they can offer you a greater number of loan products.
Whether you should work with a direct mortgage lender or a broker depends on your individual finances. But in general, if you have a solid credit score without any missed or late payments on your credit reports, you can expect to pay lower fees when working with a mortgage lender directly. If your credit is less-than-perfect, though, and you might need a bad-credit mortgage, a broker might be able to find a loan with a lower mortgage rate. And if youre struggling to qualify with a mortgage banker or non-bank lender, a broker, who works with several lenders, might be able to find an originator that will approve you.
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Should I Get My Mortgage Through A Broker
When my wife and I bought our current home, we went through a mortgage broker who was able to set us up with a STEP mortgage from Scotiabank. If youre planning to buy a home in the near future or you have a mortgage thats maturing, I highly recommend that you start your search with the help of a mortgage broker. Not only is it convenient, but its also the fastest and easiest way to find out what interest rates are currently available.
Even if you end up going directly through the mortgage lender, at least youll be fully informed. If you feel like your credit history may get in the way of you getting a mortgage through your primary bank, its another reason to reach out to a mortgage broker. Regardless of your situation, you can feel confident that an experienced broker has the connections and the expertise to help you find the right mortgage.
Tom Drake is the owner and head writer of the award-winning MapleMoney. With a career as a Financial Analyst and over a decade writing about personal finance, Tom has the knowledge to help you get control of your money and make it work for you.
What You Should Look For In A Mortgage Broker
Great reviews We cannot stress this enough, if theyre good at what they do, there should be lots of evidence of this. This could be consistently high reviews youve spotted online. Or a Mortgage Broker a friend or family member has recommended.
Whole of Market meaning they have access to all the main and specialist Mortgage Lenders that you require.
Fair fees If an Advisor is charging you a fee, it is more than £500 and your case is relatively straight forward. Its probably best to move on and find a different Advisor. If youre happy with the Advisor you have found, see if you are able to negotiate their fee down.
CeMap Qualified They are fully CeMap qualifed, which is the bench mark for UK Mortgage Advisors.
Fully Regulated They are regulated by the Financial Conduct Authority.
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What Does A Mortgage Broker Do
A mortgage broker aims to complete real estate transactions as a third-party intermediary between a borrower and a lender. The broker will collect information from the individual and go to multiple lenders in order to find the best potential loan for their client. Finally, the broker serves as the loan officer they collect the necessary information and work with both parties to get the loan closed.
What Are The Advantages Of Using A Mortgage Broker
There are several advantages in using a mortgage broker. The first is that they will gather up your information and go to the different banks for you. Since their typical way of getting paid only happens when the mortgage is complete, they are incentivized to get you a mortgage.
You get the best rate for your situation
Mortgage brokers have access to dozens of lenders, allowing them to make sure youre getting the most competitive rate available.
They know that getting a good rate is at the top of everyones list, and they know that even someone with little knowledge of mortgages is going to have a good idea of where the current bank rates are sitting.
This forces them to stay on their game and make sure their customers are getting the best rates possible.
Remember, the business of selling mortgages is a competitive game, where referrals go a long way. Its in their best interest to ensure you get the best service and the best rate.
Mortgage brokers are less strict than banks
When you sit down to apply for a mortgage with a bank, they plug all your numbers into a computer and see what comes out. A mortgage broker deals with so many different lenders who all do their own calculations, that each differs slightly from one another. This usually results in many more options and ones that arent so black and white.
They stay up to date on all of the latest products available
They only get paid if you sign a mortgage
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Speak To A Mortgage Broker
Applying for a mortgage through a mortgage broker is a better alternative to going straight to a bank building society or credit union. The advisors we work with can recommend products from across the market, offer you bespoke advice and help you with your application.
Call 0808 189 2301 or make an enquiry and well match you with a broker who could potentially save you time, money and possible disappointment. We wont charge a fee for introducing you and theres no obligation to act on their advice.
Ask us a question
We know everyone’s circumstances are different, that’s why we work with mortgage brokers who are experts in all different mortgage subjects.Ask us a question and we’ll get the best expert to help.
How To Get Your Credit Ready For A Mortgage
For most people, a mortgage is the biggest and most consequential loan they’ll ever get. It typically involves the largest sum of money and the longest loan term, so details matteron both sides of the lending relationship.
Your credit score and history play a major role in whether you’ll be approved for a mortgage and what your interest rate and terms will be. Before you begin shopping for a loan, be sure to prepare your credit for the scrutiny of the loan process. If your credit is in need of a reboot, you may want to postpone your home search until you can take time to rebuild your credit.
In addition to checking your credit score and report, consider these steps to maintaining your best credit throughout the loan application process:
- Pay every bill on time. Payment history is the most important factor in your credit score. Even if you can only make minimum payments, don’t be late. A single late payment stays on your credit report for seven years and will hurt your credit.
- Minimize debt. If you can pay down any outstanding debt, particularly credit card balances, this is a great time to do so.
- Don’t take out additional loans or add to your credit card balances. Try to put off any large purchases until after your home loan is funded.
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