Your mortgage broker can help you to consolidate your house buying costs over the coming years. But before entering into an agreement with a broker it’s important to select a company that can assure you of exceptional service.
Most buyers don’t have significant experience within this element of the home-buying process, and so within this latest post we’ll highlight our guide to selecting a qualified mortgage broker.
1. Consider Experience
Within the mortgage broker industry, companies experience a significant turnover rate, and so it’s critical that you analyze the broker carefully and ensure they have the requisite experience to provide value for money on their services. Find out how long the broker and their company have been in business and ask them about the type of work they’ve completed in the past.
2. Discuss the Mode of Compensation
The mode of compensation for the mortgage broker should be a leading consideration when evaluating your options. The vast majority are paid via a fee comprising a percentage of the loan amount. This percentage is the same for each loan they sign for the company. Others are paid via yield premiums, which are due to the broker when they sign the borrower to a higher yielding mortgage rate. Those paid a percentage of the loan amount require a higher fee up front, while those paid by yield spread premiums are paid over time. It’s important to discuss both options and review the final total cost before signing an agreement.
3. Ask About Rate Locks
Rate locks are sometimes used by brokers as a way to use the borrower’s mortgage to speculate on the rise and fall of the rates. If a broker is using rate locks, it’s up to you as the borrower to find out as much as possible about this process before signing a deal with the company. If you wish to prevent the broker speculating using your investment, you should ask for details on their processes in writing.
4. Get References
Another important part of the process for choosing a mortgage service is to get references from those that have used the service in the past. Usually, the broker will be able to provide you with two or three references for their work. When speaking with past customers of the company, ask the person about the level of service the company provided and the company’s commitment to offering affordable mortgages. Discuss whether the broker was available to answer questions and ask specifically about any problems encountered using the broker’s services.
5. Interview Several Brokers
One of the most common mistakes homebuyers make when considering mortgage brokers is only choosing the first company they contact. While this can be a great way to reduce the time involved in the search process, it might not lead you to selecting the company most qualified to handle your mortgage rate search. Speak with at least three brokers when searching for the ideal specialist. Compare both their products and their level of service, and wait until you’re truly comfortable with a specific company and its work before you move forward.
6. Prepare Carefully for Your First Official Meeting
To ensure you get the mortgage selection process moving forward effectively, it’s important you prepare for the process of meeting your mortgage broker. This means bringing with you proof of income, credit card statements and other bank statements. You can then reduce the amount of time it takes to complete all the paperwork involved.
We hope you’ve gained significant knowledge on the selection process through this blog post. Take a look through each step carefully to ensure you make the right decision to secure your mortgage for years to come.