California Real Estate: Northern California Real Estate
If the thought of shopping for a mortgage horrifies you, breathe deeply and then hire a mortgage broker. A mortgage broker is simply the middleman between you and the financial lending institutions. The general aim of a broker is to shop around and find you the best deal possible.
Mortgage Brokers: A Saving Grace
The broker will also be able to help explain the somewhat confusing terms and differences between the loans. The broker will not only be able to explain the loans, but help you tackle the mountain of paperwork. In addition, if your credit history or ability to get a loan is less than stellar, a broker can help to make you more presentable. A broker can help you to improve your application and direct you to the lenders that would be more likely to approve you.
Now there is a flipside to the benefits of a broker. I think it is more something to be aware of, rather than something to deter you. A mortgage broker is in the business of selling mortgages. The broker will derive a commission from the approved loan. Generally the commission can range anywhere from one and a half to two percent of the total loan. The only positive spin on this is that the fees you would pay to a lender are the same as those you would pay to the broker. In essence, the lender and the broker share in the fees that are received from your loan. Do realize that you have every right to ask the broker how much of a percentage he or she receives. If you feel the percentage is too high, you do have the right to try to negotiate.
The following are some good questions and further points to help you choose the right broker. First ask the broker how many lenders he or she works with. How does he or she receive new information on loans and lenders? You basically are looking to see how expansive the network is, and if you are truly being offered the most up-to-date products. Lastly, you want to make sure that the broker has good communication skills and patience. Mortgages can be very complicated, and a good broker can translate the most complicated terms.