Buying a home is a big decision and you do not want to make a mistake while you are home shopping. That’s why lots of people turn to mortgage brokers to help them through the process of finding a loan. In order to help you avoid being taken advantage of during the process, here are five money savings tips that your mortgage broker doesn’t want you to know.
1. They can’t guarantee you’ll pay the lowest rates
Finding the best loan for your home requires that you take the time to shop around for the best rates. Mortgage brokers will tell you that they can find you the lowest rate on your loan but that is not necessarily true. Mortgage brokers only deal with a select number of lenders. Shopping for the loan yourself gives you the freedom to search for the best loan with the lowest rates and to accept that loan.
2. You don’t need a mortgage broker to get a loan
You can often get the best deal on a home loan by eliminating the middleman and contacting the lender yourself. Mortgage brokers are middlemen that help in the loan closing process. You can save money on your mortgage broker by personally dealing with the loan officer at your credit union or bank. This way you are in complete control of the loan process from start to finish.
3. If you’re in a hurry, there are better options available
A mortgage broker is not the best bet for individuals that are looking to close on their loan quickly. It can take an extra few weeks for a mortgage broker to get all of the required documents and files. It’s much faster to close with a financial institution if you deal with them directly. This way there is no information that needs to be relayed back and forth, and you can put all of your energy and efforts into closing on the loan much faster.
4. Mortgage brokers are expensive
While mortgage brokers can be an asset to employ, their services do not come cheaply; a good mortgage broker can easily cost you a few thousand dollars to close your loan. (Note, though, that this is not necessarily always the case. In countries such as Australia, most mortgage brokers do not charge a single cent for sourcing the home loans since they are remunerated directly by the lenders). These fees are often added into your loan amount when the time comes to settle your loan. If you are pretty knowledgeable about real estate, you can perform many of the same functions as a broker and skip the fees.
5. You could get ripped off
Because there are no uniform standards for becoming a mortgage broker, there are some unscrupulous people in this field. Dubious brokers are more often than not in the field for some quick cash and really aren’t really interested in helping their customer, who often end up with bad loan terms from shady lenders that package and resell their loans.
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