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The Benefits Of Using A Certified Mortgage Broker

April 16, 2012 | Comments: 0 | Views: 144

A mortgage is extremely burdensome and every way that would assure you the best terms overall must be sought. Most of the time, this assistance comes from a mortgage broker - a certified professional who can find the best mortgage terms by getting in touch with a wide network of creditors, who provide them with interest rates almost daily - therefore allowing them to provide you with the most current and comprehensive information for decision-making.

A mortgage broker saves you the trouble of approaching various lending institutions, and dealing with a lot of bankers. Instead, you get personalized service that will put you at ease and that will take the place of many painful meetings in unfamiliar environments. These both mean saving time and sweat.

A mortgage broker will also allow you to look into more choices, all of which are relevant to your needs and paying ability. And since choosing the right loan is not as simple as finding the lowest interest rate, a broker's services are most important in examining and understanding your circumstances, and matching it with the most ideal loan.

A good broker will provide you a wealth of information and make sure that they are understood before setting out options. Some points you may want to ask your broker about include: the various types of loans, how interest and annual percentage rates are computed, discount points and origination fees, guarantees by the lender, penalties, and all the costs that would go into the mortgage such as fees for appraisal, the credit report, the lender's title policy, pest inspection reports, escrow, recording fees, and other taxes.

An important thing to understand about how mortgage brokers work is where they get their income. Common sense will dictate that their loyalty will belong to that person who pays them. There is no one model that applies to all, but most of the time, brokers don't charge payment for their service.; it's the lenders that pay them a commission for the loans they write. But this does not always mean that lenders ask for a higher interest or mark-up rate from borrowers. These commissions that lenders offer brokers range from 0.5 to 1.25 percent of the mortgage amount, and it is computed into the lenders costs of doing business.

An added value that a mortgage broker may bring is that he or she may be able to find you a lender from another part of the country for better terms. Sometimes, a broker is also able to help out borrowers, especiall those whose credit status is not yet solid, with institutions that would not otherwise be willing to transact with such borrowers. A broker's experience with evaluating paying capacity and with matching debtors to creditors, as well as his or her good reputation may open up possibilities that you may not be able to get for yourself.

Obviously, you are not immune from risk or dirty tricks when dealing with mortgage brokers. It's good to be aware of the ways of some unscrupulous brokers so you could protect yourself from them.

The most common dirty trick is what some call "bait and switch." A broker will publish stunning terms to get you to communicate with them, and once you're in, these terms will change and you will soon realize that he or she was not willing or able to provide them anyway. If a deals sounds too good to be true, it probably is.

There are also some brokers who play the market and take advantage of the lag between the time when the loan application is submitted and the time when the loan transaction is actually perfected. If market rates rise during this period, you would indeed see your interest rate rise. However, if the rates fall, some brokers leave the rate on the loan unchanged and earn from the decline. Make sure to monitor the market and don't forget to let the broker know that you are doing so.

Remember that as the buyer, you are not under any obligation to accept what your mortgage broker offers. While they may have done a few things to arrange the best terms for you, this does not bind you to any agreement (and remember that this is what they are really expected to do). You will always have to find the most competitive rate, and you will have to do some level of checking and searching even if you have hired the services of a broker - do not accept the first rate that is offered to you. Keep in mind that at the end of the day, brokers will work for their interest. But the good thing is, providing excellent service is in their interest because it makes them more competitive. So it will also pay to scan the competition and compare rates with other lenders. Prepare to do some heavy research as a mortgage may make or break your wealth.

When Dennis purchased his first house (quite recently) he started out trying to organize the financing himself. Then quite by chance a friend introduced him to a local mortgage broker who arranged a way better loan in no time, and Dennis was stoked. Since then he's been an advocate for using professionals like those you will find on

Source: EzineArticles
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