During the homebuying process, you might feel overwhelmed with the number of choices you face. Not only will you have to walk through dozens of houses in an effort to find your dream home, you’ll also need to think about where and how to get your mortgage—not to mention the logistics of how you’ll actually move to your new location.
Oftentimes, choosing a mortgage broker takes a backseat to other variables in the process, but this is a decision that demands your attention.
Why Your Choice in Mortgage Brokers Matters
It may not seem like your mortgage broker decision matters much, since many mortgage brokers will have similar offers, but ultimately your choice could affect the following:
- Finding the best financial option. Brokers exist to help you find different financial options for your mortgage. For example, you may qualify for a first-time homebuyer’s program in your city that gives you a significant tax credit, and not even realize it.
- Getting the best rates. There are several factors that will influence the mortgage rate you can get, but not all of those factors are easy to understand—and even if you do understand them, different lenders may have different programs available. Your mortgage broker, if experienced and insightful, can help you ensure you get the best possible rate, which means you’ll pay less interest on your loan over time.
- Smoothing the pre-approval process. For the most part, your mortgage broker will work to make the pre-approval and formal application as smooth as possible. They want the paperwork in place as quickly and efficiently as you do, so they’ll work to help you find the best options and streamline the process.
- Securing all the paperwork you need. It can be tough to organize all the documentation you need for the mortgage application process, but with the right broker on your side, you’ll have a much easier time assembling and managing these pieces.
Factors to Consider
Now let’s turn our attention to the main factors you should consider when choosing a mortgage broker:
- Online vs. offline. First, look at whether your mortgage broker operates primarily online or offline. There are significant benefits to working with an online mortgage broker, including the convenience of 24/7 service, and universal accessibility. However, if you want a more traditional process, or need a face-to-face interaction to feel content, an offline mortgage broker may be a better option.
- The process. Each mortgage broker will have a slightly varying process for how to handle new clients, choose the best financing options, and ultimately keep the mortgage application moving forward. Understanding this process, and choosing the broker with the most streamlined or straightforward one, can help you in the long run.
- The rate. Some mortgage brokers will charge you a percentage of the loan amount, often 1 or 2 percent, for their services. In other cases, they’ll be charging the lender. Make sure you understand who’s responsible for this rate and what the rate is, since it will vary from broker to broker.
- Team experience. How long has this mortgage broker been working? Do they have a team of people supporting them? The more cumulative experience you have on your side, the more likely it is that you’ll find the right financing options, and walk away with the best, most efficient mortgage for your situation.
- Reviews and recommendations. It’s also worth considering what other homebuyers’ experiences have been like with this mortgage broker. Is this someone who came as recommended to you by a friend or colleague? Are there any reviews for their services available? Or is this person new to the game?
- Personal interactions. If you’re working with a broker one-on-one, it’s a good idea to get a feel for the personal experience you have with them. Since you’ll need to collaborate on some items (like getting all the right paperwork together), it pays to find someone likable and easy to communicate with.
It’s also worth noting that you don’t have to choose a mortgage broker at all. In fact, you could go directly to a mortgage lender if you were certain you knew what you wanted. However, if you’re inexperienced with the homebuying process, you won’t have access to the expert advice and guidance that a mortgage broker offers. It’s typically in your best interest to choose the best mortgage broker you can and go from there.