To broker or not to broker--this is a question in many home buyers’ minds. Working with a mortgage broker can be advantageous, especially when you are unsure about going to directly to a lender or a bank. However, hiring one does come with its own set of disadvantages. Below are important pros and cons you should know about when deciding whether or not you need professional help from a mortgage broker when seeking home loan approval:
• Pro: Mortgage brokers are one-stop-shops that help you find any type of loan you might need to finance your purchase. They work with a wide variety of lenders, banks, and mortgage companies that you may not have access to and they can make the process of comparing mortgage options faster and easier so you won’t have to shop for different lenders yourself. Mortgage brokers can help you through the entire mortgage process, starting from loan pre-approval to closing the deal.
• Con: In cases where you wish to pursue mortgage approval from a lender or a bank in which you have an existing borrower-lender relationship, applying directly might be more beneficial than working through a mortgage broker who doesn’t have an existing relationship with the lender.
• Pro: Mortgage brokers know the business, which gives you the advantage of having professional guidance as you wade through the loan application process. Instead of learning about mortgages and the confusing language lenders use on your own, you have the guidance of a broker to help you understand what you need to know about the financing you wish to gain and establish.
• Con: Mortgage brokers work on commission, meaning they are likely to ask for a fee that is equivalent to a certain percentage of your mortgage amount. This means additional cost on your part. However, many borrowers find the investment worthwhile, especially since there is less work involved when hiring brokers.
