As the mortgage market has become more competitive, it has become a more common choice for many people to choose a mortgage broker to assist them with the lending process. While it’s great to have someone to help you with the fine details, there are some important differences between what a mortgage broker does and what you might think they do, so here are some things to be aware of.
They Can’t Approve Your Mortgage
Many people think that having a mortgage broker is a surefire way to obtain a home loan, but because brokers are a separate entity from the bank, they do not have the authority to approve your application. Instead, a good broker will be able to give you information about the best loans for you and ensure all the guidelines for the application are met.
The Rules Of Down Payments
According to founder of Arcus Lending, Shashank Shekhar, “You can’t borrow a down payment – it’s just not allowed.” Many people may not know this, but a down payment needs to be money that you’ve come up with on your own. If much of your down payment money was gifted to you, it’s important to let your broker know so this can be documented in your paperwork.
They’re Commission Based
Most potential home buyers have a lot of questions when it comes to buying a home, but a mortgage broker is not necessarily the person to consult if you’re starting from square one. Because many brokers are commission-based, time is of the essence for them, so if you’re not really serious about buying a home, you may want to do some research before setting up a consultation.
Financial Changes Can Impact Your Application
When you’re going through the process of getting a mortgage, it can be easy to forget to consult with your broker or let them know of any changes, but it’s very important to keep them in the loop so your approval isn’t impacted. A large expenditure or change in your finances can cause issues with your mortgage, so ensure that before you do anything big you contact your broker to determine how to proceed.
Utilizing a mortgage broker for a home purchase is becoming more popular with the competitiveness of the industry, but there are things you should know before reaching out to a professional. If you’ve done your research and are currently looking for a broker in your area, you may want to contact one of our mortgage specialists for more information.