The housing market has been out of control over the last year. Home prices shot up over 15% and homes are on the market for half the time.
That means that if you’re planning on buying a home in this market, you need to be prepared. You have to have everything in place before you make an offer. Any delays will turn into a lost opportunity.
Your first step is to find a mortgage broker and get preapproved for a loan. That gives you more power when you make an offer on a home.
How can you make sure you find the right lender for your next home purchase? Read on to find out.
1. What Is a Mortgage Broker?
You’re going to come across a few job titles when you begin your search. You’ll find loan officers, lenders, mortgage bankers, among others.
What is a mortgage broker and how do they compare to these other lenders? A mortgage broker is usually an independent person that affiliates with a few different lenders.
A mortgage broker analyzes different loans and finds the best one for you. A mortgage broker like Borrowing Made Simple looks at your financial situation and contacts lenders on your behalf.
A loan officer tends to be an employee of a bank, so they only offer one set of mortgage programs.
2. Lenders They Work With
Mortgage brokers work with certain banks. There are some banks that brokers refuse to work with due to horrible service.
You should ask a mortgage broker which lenders they work with and why. Ask them if there are any lenders that they don’t consider at all.
3. Know Your Financial Picture
Do you know how much you can spend on a home purchase?
The best way for a mortgage broker to help you is to go in with a lot of information. They’ll need to know your income, budget, credit score, and other financial information.
They need to know your financial picture so they can find the best loan program for you.
4. Mortgage Broker Fees and Commissions
You don’t pay for a mortgage broker out of pocket. They make money from commissions, which amount to about 2% of the loan.
They don’t get paid until the loan closes. What you do need to know is who pays for their services. Sometimes it’s the lender and sometimes the borrower.
5. Referrals and Testimonials
Your real estate agent is likely to recommend at least one mortgage lender. Do your homework and find out what others have to say about the mortgage broker.
Look at online reviews, ask for testimonials, and see if there are testimonials posted on the mortgage broker’s website.
Find a Mortgage Broker Quickly
The housing market is so hot, you have to have your team in place. That includes a real estate agent and a mortgage broker.
How can you find a mortgage broker? You need to understand what a mortgage broker does. Do your research and learn how mortgage brokers work. Compare a few mortgage brokers and decide which one is right for you.
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