When you are buying a home, you may work with a mortgage broker who is licensed to advise you, find loan options, and negotiate your home financing. People work with these professionals because it gives them access to a greater number of financing options. Most of the lenders in Canada find borrowers through the mortgage broker channel network, and you can search for a “mortgage broker near me” to find a professional who works with all credit and financial situations. Take a look at the top six considerations when hiring a mortgage broker.
1. Consider Their Specialty
Mortgage brokers often specialize in certain types of financing. They may work mostly in the prime mortgage market, which is for clients with excellent credit and income. There is also a bad-credit mortgage market for brokers who work with clients who have poor credit and income that is hard to confirm. Some mortgage brokers work with all clients, and others are location-specific. Find out the specialty when you are making a choice.
2. Ask What Lenders They Use
When you search for a mortgage broker near me, be sure to find out what lenders they use for mortgages. For example, if you choose a bad-credit mortgage broker, you wouldn’t want them to send your loan application out to lenders who only approve customers with good credit. Find out what lenders they use and what experience they have in getting a mortgage approved for someone with a similar credit profile to yours.
3. Find Out How Many Lenders They Work With
One of the reasons that people use a mortgage broker is that they have access to a lot of different lenders. This is especially important if you have less-than-perfect credit because the broker has more options available for you. In addition, when a mortgage broker works with a large number of lenders, it shows that they have more experience and have helped people with a range of financial backgrounds. Mortgage brokers need to be validated and approved by lenders before they can offer their products to clients, so having access to more lenders shows that they are trusted by the lenders.
4. Consider the Costs
It isn’t free to get a mortgage; you may have an origination fee, brokerage fee, lawyer fees, and more. You should ask your mortgage broker for an estimate of all of the costs and fees for your mortgage. Most of the time, these costs are added to your mortgage, so you may not be paying out of pocket, but you will pay for them in the future. They should be able to tell you how much money you need to pay upfront at closing and what fees will be added to your mortgage.
5. Ask How They Meet
In the past, you had to physically enter a mortgage broker’s office and sign a lot of papers. Today, there are more convenient options available. Some brokers have video conferencing so that you don’t have to take the time to go in. They may use technology that allows you to use an e-signature to sign your documents online. Some mortgage brokers even offer an app that keeps all of your information in one place, and it gives you a to-do list and allows you to upload requested documents. You may want to go in to sign your paperwork, but find out what they offer so that you know what is available.
6. Ask if They Have a Consultation Fee
Every mortgage broker is different, and you can’t make any assumptions. Before you get started, find out if they charge a consultation fee. You may find that they do, or they may charge one that is credited to you if you use their services. Either way, it is important to go into any professional relationship with your eyes open. This way, you won’t be surprised later on.