When you make the decision to refinance your existing mortgage or purchase a new home, you have the decision to work with a mortgage broker or with a direct lender. It may initially make sense to cut out the middle man and work with a lender. However, brokers offer exceptional services that will benefit you throughout your transaction. While there is a fee associated with using a broker’s services, you will find that there is true value in these services.
Understanding the Market
When you head straight to a lender, you will typically receive little education or insight about the mortgage industry. With a traditional or standard loan request, you may find that the market can be complicated and confusing. After all, there are many terms and concepts that can be difficult to understand. You will be on your own to figure the terms and process out on your own when you work with a lender directly. When you have a special loan situation, such as with a bad credit mortgage refinance or purchase loan, your loan is much more complex. On the other hand, our mortgage broker has an incredible understanding of the market, and you can use this insight and guidance in your favor as you try to find the right loan program for your needs. In fact, your broker likely knows exactly which traditional or high risk mortgage lenders would be the best option for your specific loan request. This can save you time and hassle, and it can also ensure that you get the right loan set up for your needs.
Working on Your Behalf
Your mortgage broker is an independent consultant who has been hired by you and who is working on your behalf throughout the mortgage financing process. On the other hand, when you work directly with a lender, you will work with a representative who is a bank employee. This representative serves the bank’s interests rather than yours. Your home loan is one of the most significant debts that you may take on. Therefore, it is in your interest to hire an expert who is working on your behalf to set up the right loan and to guide you through the process.
You understandably want to keep your closing costs as low as possible when buying a new home or refinancing your existing loan. However, in some cases, you may lose money overall when you work with a direct lender and do not have a broker shopping on your behalf. After all, the lender who you work with will affect your closing costs, loan amount and interest rate. Your broker can help you to find the most affordable loan and may save you far more than you pay for his or her services.