In my last blog post in this series I want to debunk the myths around mortgage brokers. Now, in ANY other industry, adding a middle man to any purchasing process usually means that YOU pay more. (Think of travel for example...we all now know that booking flights ourselves saves us some serious dough.)
BUT - did you know that getting a mortgage broker can literally save you thousands of dollars? So - why is it when it comes to making the biggest money decision in your life, that it will actually save you money to add a middle man? Here’s why...a mortgage broker is someone who is trained to represent YOU - not the bank when you’re shopping for a mortgage. Plus...
#1. Mortgage Brokers are FREE
Let me repeat that for you...mortgage brokers don’t cost you a penny. So not only do they work for you, and save you thousands....their services don’t cost you a thing.
So..who pays the brokers? Good question. Brokers are actually paid by the lenders once they close a mortgage deal with you.
#2. Mortgage Brokers Do the Leg Work
Imagine this scenario...you’re looking for a mortgage and you want to do the wise thing and compare mortgage rates. Would you rather visit the lenders and negotiate everything yourself, or would you rather let an expert do the leg work for you and get you the best rate in the market? (Most would prefer the latter of the two!)
Mortgage brokers are trained experts that will find you the best mortgage rate for your personal situation. It’s their job to talk to you, understand your needs and then search the market to find you the best rate based on those needs. What could be better?
#3. Mortgage Brokers Protect Your Credit Score
Did you know that if you go to multiple lenders on your own, you will have multiple credit reports pulled from your account? Yikes! Protect your credit score - using a mortgage broker means that your credit report is only pulled once.
#4. Mortgage Brokers are Gurus
Mortgage Brokers are trained and certified professionals on all things mortgages...what they’re NOT is trained salesmen from your bank. This means that a good broker should be able to give you insight into the latest mortgage information, economic news and the ins and outs of the mortgage industry.
#5. Mortgage Brokers Save Your Money (KA-CHING!$$)
Those that compare rates with a broker, generally do get a better rate since they’re shopping around for your best interest. PLUS - since brokers are such a wealth of knowledge, they can also give you great tips on how to save in the long run, while fitting in with your budget.
So...have I convinced you yet? Go ahead and contact a mortgage broker, or compare mortgage rates to see what rates brokers can offer you.
Kelvin
Read The Whole Mortgage Monday Series
This is the 5th and final post in the Mortgage Monday series. Kelvin has put together a fantastic set of posts relating to how to save money on your mortgage so, if you haven’t read the other ones as of yet, you should start from the begging and read the entire Mortgage Monday series.
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We used a mortgage broker when we bought our house and it worked great. We got the best deal out there and they looked after all the fine print for us. I would definitely use one again.
October 17, 2011 @ 12:04 pmI didn't use one for our first house purchase, but I am definitely considering using one for the second. It seems like it avoids a lot of extra hassle and you'll probably end up with the best rate possible or very close to it.
The customers like it because they get a good rate without much work and a lot of the paperwork taken care of for them and don't have to pay a fee.
The mortgage brokers like it because they get paid well by the banks for referring business to them.
The banks like it because they can get business in bulk that requires no further negotiation with all the paperwork already in order. That way they don't have to pay a full time employee to do all of that work for them.
Win-Win-Win.
October 17, 2011 @ 12:12 pmGood article. I always use a mortgage broker when purchasing a property. More often than not they can find rates that aren't publicly advertised that are far cheaper than what the banks will post.
October 19, 2011 @ 9:15 pmI used a Broker. I don't think that I was given the very best of advice but I did get a great rate at the time for the term that I chose. The banks couldn't touch it.
*If* I ever need a mortgage again I will only go the broker route!
October 21, 2011 @ 3:28 pmI agree B-Kat, you still have to be careful about the advice you get from brokers. The only person truly looking out for your best interest is you so you need to know what you want and what's best for you personally.
October 21, 2011 @ 9:04 pmYou are absolutely right. Mortgage broker service is free and they do all the work. It's also good to have a close friend who is a mortgage broker. I go to him because he not only gives me the best service, he gets me the lowest interest rate. Another service that is free is realtor when buying a house. Only the seller pays the realtor fees. This applies to when finding a rental home. As a renter, you pay nothing to the realtor.
October 21, 2011 @ 9:34 pmPost new comment