When It’s Time to Choose a New Mortgage Broker
Buying a new home or refinancing your mortgage can help you build wealth and put you on the fast track to reach long-term financial goals. So it makes sense to shop for the lowest mortgage rate. At first glance, this seems like a smart move, but it’s not always the best financial move. But choosing the right mortgage broker is the most important decision you can make after you find your dream home.
The truth is, your mortgage is a complex financial agreement that includes your mortgage rate, fees and closing costs, mortgage insurance premiums, refinancing limitations, and even prepayment penalties.
The right mortgage broker can save you thousands of dollars and set you up for financial success. Even better, deciding on the right mortgage broker can save you time, reduce stress, and almost guarantee you get the best mortgage possible. Here’s why.
When is it wise to choose a new mortgage broker?
If you have a long-term relationship with a mortgage lender you trust who has helped you through several home loans and real estate investments, you’re set.
However, it’s worth it to compare your options and consider working with a new mortgage broker if you are in any of the following situations:
- Refinancing your mortgage
- Buying an investment property
- Buying a second home or vacation home
- Investing in commercial real estate
- Relocating to a new area
- Building your own home
How to Choose the Right Mortgage Broker
When you use a mortgage broker, they are working on your behalf. Mortgage brokers partner with multiple lenders and have access to a large assortment of loan programs. As a result, they have more flexibility than direct lenders and can shop around to make sure you get the best mortgage possible.
1. Choose a mortgage broker who specializes in custom mortgages
No homeowner should settle for a one-size-fits-all mortgage. Consider a few costly variables that can cost thousands, even if a lender promises a low introductory interest rate:
- Origination fees
- Mortgage points
- Adjustable-rate terms
- Private mortgage insurance
- Title insurance
- Homeowners insurance
- Variable loan terms
- Prepayment penalties
- Balloon payments
- APR vs. Interest rate
Working with a mortgage broker who is experienced with custom mortgages can get you a better home loan, hands down. A qualified mortgage broker will look at your whole package — your property, appraisal and purchase price, credit report, income, debt-to-income ratio, assets, personal financial goals, mortgage payment, affordable budget — and help build a custom home loan that truly meets your financial goals.
2. Find a mortgage broker who is experienced with real estate investments (not just home loans)
Once you’re a homeowner, you’ll begin building equity, building your wealth, and considering new investments. It’s important to partner with a mortgage broker who understands real estate investing. An experienced mortgage broker can help you leverage the equity in your home effectively so that you can grow your wealth.
Down the road, you might want to buy a vacation home or investment property. An experienced mortgage broker will know the best options and how to secure the best loan terms for your property. Home equity loans, home equity lines of credit, cash-out-refinancing, renovation loans, and jumbo loans are a few popular options.
An experienced mortgage broker can help you navigate your best options and secure the loan that meets every financial objective.
3. Choose a mortgage broker who is licensed in the area where you want to buy or invest
Mortgage brokers are licensed in specific states. For example, if you’re relocating from California to Washington and looking for a VA loan, then it’s important to confirm that your mortgage broker is licensed in those states and also services VA loans. Depending on the type of loan you want or where you’re buying the property will help you decide on the best mortgage broker.
4. Choose a mortgage broker who specializes in the type of loan you’re considering
Mortgage brokers don’t always service all types of loans. For example, some mortgage brokers don’t service government-backed mortgages, while others may not write enough jumbo loans to be competitive. If you’re looking for a specific loan (e.g., an FHA loan, USDA loan, or a Fannie Mae Homestyle loan), make sure your mortgage broker is qualified and licensed. In short, find out early if there are any limitations to the types of loans you can qualify if you decide to use that mortgage broker.
5. Choose a mortgage broker that has excellent client reviews
In the best-case scenario, a friend or colleague recommends a great mortgage broker with a solid history of happy clients. If you’re moving to a new area or searching on your own, seek out reviews and client satisfaction rates.
When you use an experienced mortgage broker, you can trust them to do the legwork for you. You know you’ll be getting the best rate and best terms available for your home loan. A good mortgage broker focuses on getting their clients the best mortgage on the market.
What’s more, a good mortgage broker will work hard to make sure the loan closes on time and there are no mistakes along the way. They are working on your behalf every step of the way to make sure your loan closes on time with no delays.
Finally, find out how the mortgage broker gets paid.
Typically, mortgage brokers get paid directly by the mortgage lender once a loan is funded. A mortgage broker is able to secure home loans at wholesale pricing, which means the mortgage lender pays the broker directly once the loan is written. This fee is typically not passed on to the borrower. However, if you see broker fees listed at closing or on the loan estimate, make sure to ask your mortgage broker directly to clarify the fee.
Takeaway
When you use a mortgage broker, they are working on your behalf. Mortgage brokers partner with multiple lenders and have access to a large assortment of loan programs. As a result, they have more flexibility than direct lenders and can shop around to make sure you get the best mortgage possible.
Working with a mortgage broker is an important relationship that will impact your mortgage and your finances. Just like a realtor or a mortgage lender, they have a big impact on the final terms of your mortgage. An experienced mortgage broker can help you build your wealth as your home equity grows.
What’s Next
In most cases, working with the right mortgage broker will get you the best mortgage and the strongest loan terms. We work with multiple lenders across California, Oregon, Washington and Colorado to secure competitive quotes and make sure our clients get the best mortgage. Our goal is to save you money and help you reach financial freedom. Give us a call to get started.
