Mortgage Brokers Make Mortgages Easier
Simply stated, mortgage brokers make the mortgage process easier. Selecting the right lender for your mortgage can seem pretty simple, but there are a few things you should know about the process. While lenders may advertise great rates and easy processes, each lender has their preferred practices that can subtly shape the mortgage process in ways that may help or hurt you.
What You Don’t Know About The Mortgage Process Can Hurt You
When people shop for mortgages they, rightfully so, tend to focus on the mortgage rate and associated closing costs. After all, cost seems to be the 800-pound gorilla when it comes to the largest purchase you will likely ever make. And while mortgage rates are quite significant, the rate doesn’t make much difference if you make it half-way through the process only to be upended by a requirement of which you weren’t aware.
If you know anything about finances, it’s easy to miss large numbers by very small amounts. In other words, could you imagine learning that your home loan will not complete because your credit score is 10 points under the minimum? How about late notice that your debt-to-income ratio is less than a point higher than the lender allows for with their underwriting policy? These seem like disaster scenarios when time is of the essence.
Unfortunately, these are mortgage scenarios that do happen. If you have shopped around based on the big numbers, these events are more like the fine print of the process. Lenders don’t typically advertise their debt-to-income ratio thresholds. Even if you can locate the minimum credit score necessary to qualify for a certain lender, there are still other parts of the process that could go awry. How do you know the difference?
Lenders Develop Risk Profiles
Each lender has to decide what will be important to review for a potential borrower. They develop something called a risk profile to help understand what types of borrowers are consistent with their underwriting guidelines. This translates to a variety of methods for underwriting mortgages. Some lenders may focus more heavily on a credit score, while others may look more closely at debts the potential borrower has accrued. Some lenders are more flexible with requirements while others are more stringent.
Mortgage Brokers Know Their Lenders
At the end of the day, you deserve the lowest interest rate available to you. Lenders will traditionally work through Loan Officers or Mortgage Bankers to make their mortgage loans. This means that the Loan Officer or Mortgage Banker will offer only the products that the Bank offers. If you are lucky enough, it will be a good fit. However, you can leave money on the table if you happen to work with a Loan Officer of a Bank that develops a risk profile not as favorable to your conditions. This can translate to a higher rate or add additional costs and headaches to the process.
Many tend to think of a Mortgage Broker as a middleman or middlewoman between them and the lender. The reality is that a Mortgage Broker is a source of income for the lender. Mortgage Brokers are ultimately a way for banks to further expand their lending without hiring additional staff or running a new branch. Lenders know that working with a Mortgage Broker requires their best foot forward, so to speak. They cannot run the risk of padding a rate or the associated closing costs, as it may render them less competitive with a rival lender.
All of this works in your favor when you work with a Mortgage Broker. Brokers are always assessing a lender’s rates and their performance. They will have other clients who use the service, and have a means of honest feedback on the process. If rates and fees are tightly competitive, then the Mortgage Broker will look to customer service or responsivity to select the right lender. Mortgage Brokers have the level of experience in dealing directly with the lender to make a sound judgement based on current practice.
Mortgage Brokers Help Their Clients Win
When you work with a Mortgage Broker, their knowledge of lenders is paired with their knowledge of your specific situation. This knowledge means that they can accurately predict which lenders offer the best possibility both for a good rate and efficient experience. They help both borrowers and lenders to find the right match, which results in a good deal for both parties. And this is a deal which will save you time and money.
They also know the ins and outs of communicating with the lender, and can have you assemble information that will speed the process down the line. They can anticipate bumps in the process and work with you to convey critical information.
Working with a Mortgage Broker like Range Lending means that you have a Mortgage Broker working for you. With some of the quickest times to close in Michigan, we work tirelessly to help our clients find the perfect home and get into it as quickly as possible. If you want to work with a true team of dedicated mortgage professionals, look no further than Range Lending! Give us a quick call today to get started on the mortgage process, whether you have found that dream home or would simply like to refinance!