Choose the Best Mortgage Broker
The real estate market seems to be on the recovery path after four years of falling property prices. According to the Housing Industry Association (HIA), bankruptcies and foreclosures are stabilizing. As a result, homebuilder sentiment and demand for properties is rising due to low mortgage interest rates that favor home buyers. Figures published by the HIA show interest rates for 30-year Fixed Rate Mortgages (FRMs) stand at 3.38%. Mortgage interest rates for 15-year FRMs stand at 3.35%. To benefit from these low-interest rates, you need guidance from a mortgage broker. Keep reading to learn how to choose the best mortgage broker.
This should probably be the first item on your checklist since a broker with years of experience in the mortgage industry is more likely to be reliable and have many contacts in the industry that would help to move things along faster. Also, an experienced mortgage broker can help you choose the right mortgage product by providing input on certain processes such as identifying a mortgage lender,pre-qualifying, and rebates.
A Good Financial Planner
If you take out a mortgage to buy a house, you have to keep your end of the bargain and make regular mortgage payments for the duration of the loan, which is usually many years. With that in mind, choose a broker who can act as a financial planner and guide you through mortgage aspects such as refinancing and interest rates. A broker with a good grasp of financial planning will also come in handy if your financial literacy is not up to scratch.
Access to a Wide Range of Lenders
Your mortgage broker should have a good working relationship with many lenders. If your broker represents one or two mortgage lenders, you need to rethink your relationship. Such narrow representation means you are unlikely to get a mortgage that suits your needs. Instead, choose a broker who represents a wide range of mortgage lenders including credit unions, community banks, and community development financial institutions.
A Good Communicator
Besides experience, your mortgage broker should be a good communicator. The mortgage process includes a lot of financial and legal jargon that only a few people can grasp. To start with, the broker should explain the mortgage pre-qualification process in a manner that you can understand. Secondly, the broker should explain why a particular mortgage loan is right for you in clear and plain English. Thirdly, the broker should explain how long it would take to complete the loan process. Even if you are communicating with the broker online, look elsewhere if you cannot understand what he or she is talking about.checkout other related information at http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2016/02/brokers-showing-their-hands-the-repercussions.html
A mortgage broker should be a member of a professional organization. The Mortgage and Finance Association of Australia(MFAA) is a reputable body that promotes professionalism in the mortgage brokerage industry. Furthermore, MFAA trains members to uphold best practices and ethical standards at all times. You should also use the ACCC to find information about the reputation of the broker. Avoid brokers with a large number of complaints from past clients.
Fees and Commissions
Brokers earn money for the services they offer. These earnings come from either the mortgage lender, the person looking for a mortgage, or a combination of both. If you would like to receive unbiased advice, go for a broker who charges home buyers a commission. This is because some mortgage lenders sway the loyalty of brokers by offering commissions. Do not shy from asking a broker whether he or she receives a commission after recommending a particular product.
Licensing and FHA Qualification
The majority of states require mortgage brokers to have a license. This shows that the broker has gone through a thorough background check as well as rigorous testing. If the broker has a website, visitors should see the licensing information. Do not just rely on the information provided by the broker. Visit your state government’s website to crosscheck and verify the licensing facts. Some state governments provide a list of all licensed brokers. Also, choose a broker who has the qualification to originate FHB loans. For many first time home buyers, these loans are quite affordable.
The home buying process can be quite challenging even for the most seasoned real estate investor. As such, a mortgage broker is an important piece of the whole process. A few of the factors to consider when choosing the best mortgage broker include good communication skills, professional affiliations, a good grasp of financial planning, licensing and FHA qualification, as well as access to a wide range of mortgage lenders. Finally, a good broker will give you a good-faith estimate of costs associated with the mortgage.