Obtaining appropriate financing is one of the most important steps in the home-buying process. But what many home buyers don’t know is that the financial side of home buying can turn into a nightmare, particularly when the person knows nothing about getting a mortgage. Though a competent and experienced mortgage broker will be happy to assist anyone with the lending process, below are four essential things a home buyer should be aware of before reaching out to a professional.
- A mortgage broker can ease the strain of obtaining a mortgage – When applying for a mortgage, a borrower might need to work with several institutions and/or people in order to finalize the real estate transaction. These are as follows:
– the loan officer, who will assess the overall financial situation, credit history and employment status so that he can offer each applicant a financing option that fits his needs;
– the loan processor, who will prepare the mortgage application for presentation to the underwriter;
– the mortgage underwriter, who will review the file and determine whether the mortgage applicant qualifies or not for the financing option selected;
– the real estate agent, who can help the home buyer find the kind of property he wants;
– the home appraiser, who will inspect the property and establish its fair market value;
– the home inspector, who will perform a more in-depth inspection to ensure the property is in good condition;
– the closing agent, who will coordinate the closing process to make sure the real estate transaction meets all the legal requirements.
When a person decides to enlist the services of a mortgage broker, not only will this professional educate and help the borrower pick the best financing option for his situation; he will also guide the file through the mortgage approval process by working closely with loan officers, processors, underwriters and closing representatives. Simply put, hiring a mortgage broker can help a home buyer get the best deal without:
– having to contact dozens of lenders, compare interest rates and review different terms and conditions;
– working with different professionals typically involved in the mortgage process;
– facing the risk of falling victim to predatory lending practices;
– paying unnecessary fees some lenders may charge in order to pad their bottom lines.
- A mortgage broker can deliver a better deal – Depending on the volume of applications a mortgage broker generates, he can get special rates from lenders. A home loan taken out through a mortgage broker, therefore, can have a lower interest rate than an applicant could get on his own, even if he has a good credit history and a high income level. Furthermore, a broker could get a lender to waive some of the fees on a certain mortgage deal, which may save the home buyer hundreds or even thousands of dollars.
- There are things a mortgage broker cannot do – While a mortgage broker can educate borrowers about different mortgage products available in the market, offer mortgage products with lower rates and more convenient terms, and take care of all the paperwork, he cannot approve mortgage applications or decide how much money a would-be home buyer can borrow. As middlemen, mortgage brokers work with both lenders and borrowers to ensure that all the guidelines for mortgage applications are met. However, only the lender can decide if an applicant will be approved for a home loan and determine the loan amount along with the interest rate.
- A mortgage broker cannot guarantee the initial interest rate – A broker can help a home purchaser get a lower interest rate, but he usually cannot obtain a rate lock. Based on the details included in the actual mortgage application and on certain last-minute changes in the credit history or employment status, the lender might change his mind and offer a different interest rate.
At North Florida Mortgage, our highly trained and dedicated mortgage brokers focus on all of our customers’ financial needs, guarding their interests and helping them get the most suitable mortgage products. Whether you’re looking for financing or refinancing options for residential, commercial or investment properties, call us at (904)-389-4635 today. One of our mortgage brokers will be glad to discuss our mortgage offerings with you, help you choose the right type of mortgage for your needs or, at least, put you on the right path to ensure you’ll qualify for an affordable mortgage in the future.