The Home Loan Mortgage Broker
Getting a broker in your team is paramount to your real estate investing success.
There are a lot of key factors that come into real estate but when you want the financing part done right, you’ll want to use a broker.
Getting good finance will set you up on a great start. So Iām going to let you in on my experience when it comes to getting finance with mortgage brokers.
What Is a Home Loan Mortgage Broker?
A broker or mortgage broker finds and arranges credit and financial products between lenders and buyers in exchange for a fee.
The broker is the middleman, acting for the borrower (buyer) to smooth out the technical aspect of the loan.
They make sure the buyer and only the buyer get the best deal for their individual circumstances.
Two Types of Mortgage Brokers
You should know that there are two types of mortgage brokers.
- A bank mortgage broker (or in house broker)
and
- An independent mortgage broker
The difference can mean you either get great financing or you get completely ripped off! So know the difference. It’s important you get this right off the bat before you start walking into financial buildings.
When you think of applying for a home loan you might think of going to the bank right? Well the only problem here is banks’ are only going to suggest to you their range of products. Why would a bank suggest going to another bank to get their cheaper rate?
See the problem?!
Your not being shown all of the financing products out there….and thats not financially intelligent.
See there’s no competition aspect you can use to your advantage. You want banks and lenders to be fighting over your business! Thats how you get a great deal. Besides big banks are notorious for charging higher than normal rates on loans based on their brand. So don’t get whipped off.
Im going to tell you the better way to get finance!
Who Should I Use?
The independent broker works for your best interest and no one else! They get out there and search for the best deal for you. You get unbiased help and advice through the process as well as choosing from an array of financial products.
I’ll give you another reason why i like using independent brokers. If your application gets rejected it shows up on your credit score. This makes it harder to get approved next time.
The Independent Mortgage Broker
The independent broker however applies on your behalf, inquires and gets a feel for whats out there. He returns the results to you and then you decide. No bad credit marks. Its a win win. That makes me happy š
Independent brokers go through certain licensing requirements where the banks brokers dont have to. They also get a different education about brokering that the banks don’t.
How much do Brokers Charge?
Heres the icing on the cake. They’re free!
Yep, most often than not they are completely free. You get all the benefits without having to spend a penny.
Brokers bring you to them, so the bank pays them the commission not you.
These brokers play a major role in the industry, there are like salesmen or affiliates to lenders. Thats pretty much how it works and its pretty darn cool if you ask me!
The only time you might have to pay a fee is when your going through a private finance situation.
You might be asking “Ok, but wouldn’t some lenders pay more than others to get the broker to use them?” The answer to that is yes, every institution would pay differently. But the amounts are mostly so insignificant its not persuasive. Mandates apply quite heavily to independents. They have to do the right thing by you or they risk loosing their license. So its just not good business for them.
Home Loan Mortgage Broker Benefits!
- Brokers save you time
- You get the choice of products
- No bad credit score
- They’re free!
By using an independent broker, they’ll get to know your situation first before suggesting lenders best suited for your specific needs. But If you walk into a bank however, they may decline you (and that mark goes on your name) you just don’t know.
Thats the risk you take when you go to a bank.
Depending on their lending criteria though you could still get it. But it just gives the impression your risky.
There’re tons of lending companies that specialise in different loans, so having a broker helps navigate through the process. Saving you a lot of time now and in the long run.
So that just bout sums it all up! That’s what mortgage broker does and as you can see they are an invaluable asset to your tool belt.
