Mortgage brokers play a vital role in today’s mortgage market by helping borrowers obtain affordable home loans. Mortgage brokers have access to various lending programs and find good mortgages for their customers. However, the role of mortgage brokers has also changed with the advent of online mortgage lending. Here are some useful tips on how to find a good mortgage term:
A mortgage broker is not an employee of the lender. Rather, mortgage brokers are independent, licensed individuals that act as a link between lenders and borrowers. Unlike mortgage agents, mortgage brokers, on behalf of their brokerage firms, perform mortgage transactions for their clients. Thus, mortgage brokers do not receive any commission or pay any commission from the lenders.
As mortgage agents work only for the lenders, they may be able to get better deals than mortgage brokers working for individual lenders. However, the deals that mortgage agents help secure for their clients differ from lender to lender. This is because the rates of interest charged by individual lenders are lower than the rates of interest charged by mortgage brokers on behalf of a lender. As a result, a mortgage broker may be able to secure a better deal for the borrower.
To get started, you need to find a good mortgage broker and discuss your requirements and needs with the broker. The mortgage broker then helps you search for suitable mortgages for you. You can start by searching online for suitable mortgage products. You will be able to find several mortgage products available such as a fixed-rate mortgage, adjustable-rate mortgage, and refinancing a mortgage. Depending on your financial situation and preferences, you may opt for a specific mortgage product.
Another useful tool you can use is the Truth in Lending Act (TILA). The TILA is a law that protects consumers from mortgage fraud by protecting them from the abusive lending practices of many lenders. You must familiarize yourself with this law before moving ahead with your purchase.
In addition, it is advisable to contact your State Attorney General or local consumer protection agency for information regarding any fraudulent activities by predatory lending institutions. This will help you identify the necessary action you should take.
The third thing you should do is find out how much commission a lender will charge you. Some mortgage brokers work on a commission basis which means that as a buyer, you will have to pay them some form of a commission whenever you purchase a house using a mortgage from them.
However, a good mortgage broker will inform you beforehand about the commission he will charge you, and the mortgage amount itself. You can make a comparison of the commission charged by different brokers to find out which one will be the cheapest.