While you can find plenty of real estate reality shows talking about what to look for in a house or how to repair a fixer-upper, there is far less advice out there about how to find the best mortgage loan. Even fewer sources discuss what to look for in a mortgage broker, one of your best sources for finding the right mortgage for you. What should you look for in a Red Deer mortgage broker?
The Cost-Benefit Ratio
The mortgage broker is typically paid a percentage of the loan amount, though they may receive an upfront fee for the service. While a mortgage broker will probably seek the lowest interest rate they can find for you, not all mortgage brokers can deliver on that promise. Maybe they work with the same lenders you’d visit on your own, and now you’re paying more than you would if you originated the loan directly with the lender. Or they accept clients with poor credit but can’t find lenders that won’t charge them an arm and a leg. In some cases, they can find a slightly better interest rate and fees than you could find yourself but these savings are offset by the mortgage broker’s fees. If the lender offers low fees (while providing good service) and a loan rate lock, they may be worth it, too. A loan rate lock would lock in today’s current low interest rates or even guarantee you’ll get the lower interest rate if rates dip before going back up.
There are times when the mortgage broker is the best choice regardless of their fees. If you are trying to buy a unique property other lenders won’t back because it would be hard to sell, you have to find the only lenders who would consider lending the money. If you’re buying a mix-use property, many lenders may not be willing to lend money for the deal whereas they would if you were buying a purely residential property.
Don’t let someone use your loan as part of their training process. Only work with mortgage brokers who’ve been in business for a few years and have a good reputation. Note that the head of the office you talk to may not be the one handling your loan. Ask who would be handling your mortgage application and how much experience they have. Note that the experience question isn’t really answered by asking, “How long have you been in business?” A business could have opened twenty years ago but the only expert on the team retired last year.
Ask everyone you know for recommendations for a referral to a mortgage broker. Don’t take the recommendation of your real estate agent unless the same mortgage broker was recommended by several other people.
Specifically ask for names of businesses to avoid, whether someone ended up with a deal different than the one they expected or the broker didn’t respond to application questions in time to close on a deal.
You can ask the mortgage broker for references. If you receive them, follow up on them, but take their recommendations with a grain of salt. If the mortgage broker doesn’t have referrals, that’s a warning that you shouldn’t work with them.
Call Josh Tagg today to receive expert mortgage advice you can trust.