A home purchase is often the biggest purchase you’ll make. In most cases, you have to take out a loan to finance the purchase.
That’s not your only option, though. A home purchase can add a lot of stress to you and your family. Mortgage specialists and brokers can help you navigate the lending process.
Your home financing will be with you for 30 years, so you want to make sure that you get it right. Keep reading to find out what it’s like to work with mortgage professionals when you buy a home.
The Difference Between Mortgage Specialists and Brokers
You’ll hear the terms mortgage specialist and mortgage broker. Some people may use these terms interchangeably, but there’s a huge difference between the two.
A mortgage specialist is someone who is an employee of a bank. Their job is to set you up with the loan offerings from that particular bank. A mortgage specialist can also be referred to as a direct lender since you’re working directly with the bank.
Mortgage brokers tend to be independent of banks. They’re middlemen (and women) who have access to a wide variety of home loan products from different banks.
They basically do the home loan shopping process for you, which can be a big convenience.
They also take into account the most current interest rate, which can fluctuate by the hour. If they suspect that you have a great rate, they’ll recommend that you lock in that rate. That can save you thousands of dollars.
You need to know the difference because you’ll be able to better understand your options. You can ask someone to clarify what they mean because you are armed with this information.
Working With a Mortgage Specialist
You may decide to work with a mortgage specialist because you already have a relationship with a particular bank.
That’s not a bad thing, but you still owe it to yourself to shop around and find the best mortgage to meet your needs.
You’ll be the one who shops at various banks yourself, which can take up a lot of time that you probably don’t have. It can also be a confusing process if you don’t know much about home lending.
When you work with a mortgage specialist, they do want to make sure that you have the right loan, but they do work for the bank. You need to keep that in mind when they recommend products.
Mortgage specialists may be tied to the bank’s criteria to approve a loan. This can make a difference if you have a special situation like a good to average credit score. Some banks may not be willing to work with you due to your credit score.
Working With Mortgage Brokers
You’ll have a much different experience working with mortgage brokers. Mortgage brokers have access to a range of different programs. They may be able to find a loan for you even if your credit is less than perfect.
Mortgage brokers are like guides in the homebuying process. They don’t get paid until the home sale closes, so they have much more at stake than mortgage specialists. Mortgage specialists usually get paid no matter what happens to the deal.
Since a mortgage broker has more at stake, they’ll do everything they can to see the deal close. There are a lot of things that can go wrong in a home purchase.
You may not know that there are things you do that can cause a loan to fall through. Something simple like changing jobs before the sale closes can cause a lender to withdraw the loan. Other things like applying for new credit cards or maxing out the cards you have to buy furniture could throw the deal into turmoil.
A lot of homebuyers don’t think about this as they’re going through day-to-day activities. A mortgage broker will educate you on some of these topics to make sure the home closes. You may not get the same level of service from a mortgage specialist.
Of course, if you have any questions, you can always ask.
How to Find the Right Mortgage Broker
Working with a mortgage specialist or a mortgage broker is a personal choice. They both have their advantages.
Mortgage brokers tend to be the better option if you want the convenience of having someone knowledgeable do the home loan shopping for you and guide you through the process.
It’s up to you to find the best mortgage broker to meet your needs. There are a lot of mortgage brokers out there, which means you have a bit of homework to do.
Ask Your Real Estate Agent
Your real estate agent usually has a network of partners that they work with on real estate transactions. There are many people involved in a home purchase, from agents to inspectors to lenders.
They may have people that they trust to get a good deal for you with a reputable lender.
Check for Licenses
The mortgage industry is heavily regulated. There are certifications and licenses a broker needs in order to do business in a particular state.
The qualifications will vary by state. You can ask your broker for their license and look it up. Your state’s revenue or business department will oversee mortgage brokers.
Find the Right Home Lender
You know that buying a home is stressful. It’s a long process that is complex and involves a lot of parts. You want to make sure that you have the right people in place to make sure your home purchase closes.
You have a choice between working with a mortgage broker or mortgage specialists. It’s important to know the difference between the two. There are advantages to each.
Mortgage specialists are good if you already have a relationship with a bank. Mortgage brokers have the flexibility to do the shopping for you.
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