Mortgage brokers get the best mortgage rates through two advantages over lending institutions: bulk pricing and competitive shopping. With a broker, you have access to these advantages plus the additional benefit of having an expert in your corner to guide you through the process and help you avoid costly mistakes.
Reduced Mortgage Rates
Mortgage brokers are the wholesale clubs of the home lending realm. When you have a membership at a wholesale club, like Costso or Sam’s Club, that club can offer you better pricing than a typical retail establishment. Why? Because they do business in bulk. Similarly, lending institutions know that mortgage brokers will be able to send them multiple loans. So, they offer loans to brokers at a reduced rate. Brokers, in turn, can extend that price break to you, so that you get the best possible APR.
If you went to a bank and applied for a mortgage, they would quote you a retail rate. Brokers are able to get you a lower, wholesale rate, due to the volume of loans they do with a particular lender.
Expert Competitive Shopping
When you go with a mortgage broker, you will automatically have the advantage of competitive shopping. Your broker will work with a variety of lenders to ensure that you’re getting the best offer from each one. Additionally, they will help you through the process, making sure all your documents get where they need to be on time and ensure that your closing goes without a hitch. The lender that your broker is working with will ensure that the documents meet their guidelines, federal requirements, and that funds are available the day of closing.
When you do your own rate shopping, you assume all the responsibility and hassle of the broker role, without the experience. You may have been trained to know the right questions to ask and pitfalls to avoid. You can even decrease your chances of getting a good rate by allowing too many lenders to query your credit, thereby lowering your score.
Choose the Right Mortgage Broker
Not all mortgage brokers are created equal. The barriers to entry in the field can be low, depending on the state, so it’s important that you make sure the broker you go with is the right choice. The difference to your loan and lending process will be tremendous. Buying a home isn’t like buying a gallon of milk. Picking the right broker can help you immensely, and picking the wrong one can be a big mistake. Must sure that you are comfortable with the qualifications and approach of the broker you choose.
At Diversified Lending, we pride ourselves in ensuring that all of our clients feel educated and informed when choosing a mortgage broker. We want to earn your business today, but we want your experience to be a great one so that you return for future loans. Apply today to get started with your no-obligation consultation.