Pros and Cons of Using a Mortgage Broker

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When looking for a mortgage, a lot of home buyers choose Houston mortgage brokers to find the best rates and terms for them. Ever since the 2008 crash of the real estate market, mortgage brokers have been under scrutiny. Are they acting and keeping the best interests of customers in mind?

Well, if you found a competent and experienced mortgage broker, you can easily find the right mortgage broker for you. However, there are also pros and cons to consider before you commit to one.

Pros

Saves You Legwork and Time

Mortgage brokers have contact with several kinds of lenders, some of these you might not even know. A broker knows when to steer away from lenders who have sneaky mortgage tricks buried in their contracts. As such, it is best if you do some bits of research before you go and meet your broker.

They Have a Lot of Access

Some lenders only work with mortgage brokers. They rely on them to bring them the right clients. As such, you might not be able to contact some lenders directly to have a retail mortgage.

You Might Get to Save Some Fees

When taking a mortgage or working with a lender, there are all kinds of costs involved including application fees, origination fees, and appraisal fees. If you have a mortgage broker, you might be able to get the lenders to waive some, if not all of the fees. This will save you thousands of money.

Good Read: Benefits of Using a Mortgage Broker

Disadvantages

Their Interests May or May Not Align with Yours

When shopping for a mortgage, you are looking for the most affordable interest rate and the lowest fees. A mortgage broker often receives a payment whenever they give a lender a client. Usually, the price is based on the mortgage amount so a broker may get you into a mortgage that will increase their compensation.

You Might Not Get the Best Deal

A lot of people assume that a broker delivers a better deal they probably can’t even get alone. However, some lenders offer their clients the same rates and terms that they provide to brokers. So it doesn’t hurt to shop around and see if a broker has the best deal for you or not. You can use a mortgage calculator to check.

There are no Guaranteed Estimates

Mortgage brokers provide their clients offers from lenders called “good faith estimate.” What does this mean? The broker thinks that the offer has all the deal’s final terms, but this is most often not the case.

Some Lenders Don’t work with Mortgage Brokers

Ever since 2008, some lenders stopped working through brokers. As such, you may not be able to access some lenders who can offer you better mortgage terms compared to what mortgage brokers can provide you with.

Conclusion

You can find the best loan deals when working with mortgage brokers however be sure to weigh in the cons before diving in. Contact some lenders to understand what types of mortgages you can avail. Make sure to always work with brokers who have excellent references and ask a guarantee when it comes to their loan estimates.