Most realtors insist that homebuyers get pre-approved to purchase before shopping for a new home. But being pre-approved by the right lender is just as important. Many home buyers turn to a Mortgage Broker to help them get the best mortgage and best rate available on the marketplace.
Here are the top reasons why the majority of homebuyers are turning to Mortgage Brokers to arrange their mortgage financing:
1. Choice of Mortage Products, terms and rates: A mortgage broker has access to a huge range of lenders including most banks and local credit unions. With more than 50 different lenders available to the mortgage broker, he or she can help match the perfect mortgage product and rate suited to your needs.
2. Independence and Objectivity: A mortgage broker works for you, not for any one lender, which opens up the kind of objectivity to focus on the product that is the best fit for you.
3. Best rate: A mortgage broker has access to rate specials and also will have some negotiating power with the lenders. Only through a Mortgage Broker would you have access to rate specials and promotions for example. Typical rate specials are “quick close” specials or limited time promotions.
4. Expert, trusted advice: You will want to work with a Mortgage Broker who has an Accredited Mortgage Professional (AMP) designation. The AMP designation is an indicator that your mortgage broker has the experience, education and expertise to guide you through the mortgage process. They are familiar with all types of mortgage products, fixed and variable, adjustable rate mortgages, home equity line of credit mortgages, blanket mortgages, matrix mortgages (combination of home equity line of credit and traditional mortgage), construction or progress draw mortgages and solutions to finance home renovations.
5. Rates: Getting the best possible rate you qualify for can potentially save you thousands of dollars in interest. That’s why homeowners are more likely to call a mortgage broker to check out their options for their mortgage and renewal. If your mortgage is coming up for renewal, call your mortgage broker 4 months before the renewal date, as your mortgage broker can lock in a rate hold for up to 120 days. In a rising rate environment, this can mean you get a better rate than what your current lender will offer you on renewal.
6. One credit inquiry: Rate shopping on your own can be hazardous to your credit. Everytime a lender checks your credit, the credit bureau takes notice and docks your score. Too many inquiries on your credit bureau in a short period of time will weaken your credit rating, and possibly affect the rate and terms of your mortgage. One credit inquiry with a mortgage broker gives you access to up to 50 lenders.
7. Free service (o.a.c.): As a rule the lender will pay compensation to your mortgage broker for qualifying you and booking your mortgage with them, at no cost to you.
8. Customized mortgage solutions: You need a mortgage plan and mortgage management system. Your mortgage broker will keep in touch with you during the term of your mortgage and help you manage your mortgage renewal.
9. Unique Mortgage Products: Your mortgage broker will know of lenders who specialize in business for self where income verification may be difficult, equity lenders, private lenders and lenders who offer second mortgage products. Your mortgage broker will also know which lenders offer unique mortgage solutions, for example, mortgages for New to Canada, purchase of second homes, blanket mortgages, etc.