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The Pros and Cons of Using a Mortgage Broker

In Denver Real Estate, Mortgage Rates | on March, 24, 2014 | by | 0 Comments
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mortgage broker pros and consIt’s a fairly common occurrence for prospective homeowners to use the services of a mortgage broker when they are interested in purchasing real estate, since a specialist, in theory, should be able to find them the “best deal” with regards to the terms of the loan and the rates attached to it. However, in recent years the ways in which licensed mortgage brokers have been operating has been put under intense security and there have been numerous allegations of malpractice. In other words it has been claimed that some mortgage brokers have been making suggestions based on their own interests rather than those of their clients. If you have been looking at homes for sale in Denver and have found the property of your dreams but need a mortgage loan to finance that dream, you need to carefully weigh up the pros and the cons of using a mortgage broker.

Pros of Working with a Mortgage Broker

  • Saves You Lots of Time – While the rise of online comparison sites has made “shopping around” for the best deal a lot easier, you will still likely need to call several (possibly more) mortgage lenders to get an accurate overview of the terms that apply and the rates you will be expected to pay, since mortgage loans are tailored to your particular situation rather than being based on a one-size-fits-all model. Making all of these calls can obviously be extremely time consuming and due to their network of contacts, mortgage brokers can often quickly get you dozens of different offers before comparing them and presenting you with the best ones.
  • They Can Save You Money Too – Sometimes the way mortgage loans are structured can be misleading unless you are familiar with them; other real estate agents, including Century 21 in Denver, would tell you the same! There are often several different fees built into the loan, which you might just accept as being “standard” but an experienced mortgage broker will know different. Based on your situation and the specifics of these fees, they may be able to get some of them reduced or waived altogether, saving you considerable amounts of money that can be spent on furnishing your new home.
  • Ensuring All Deals are Accurately Compared – Mortgage loans are not all created equal and when going through the details, it can be relatively easy to overlook something important and compare the “deals” you are offered inaccurately. Mortgage brokers do this for a living though and you can be sure that they are not going to miss a trick or read the details incorrectly and rule out a good proposal by mistake.
  • Their Own Exclusive Network of Lenders – The more lenders you have access to, the better; it’s as simple as that! You might not be aware, but some financial lenders won’t deal directly with individuals (like you) and prefer to collaborate with mortgage lenders that bring them a regular stream of “hot” leads. This means that by working with a mortgage lender you will probably have more mortgage loans to choose from and these lenders that would otherwise be off limits typically offer mortgage brokers favorable rates due to them bringing a considerable amount of regular business.

Cons of Working with a Mortgage Broker

  • Considerable Trust Involved – As a real estate agent in Denver, we wouldn’t be doing our job properly if we didn’t remind you that purchasing a property and agreeing to a mortgage loan is a very big deal. It’s a long-term commitment that could affect your life for as much as 25 years, therefore you are placing a significant amount of trust in the mortgage broker to do right by you. However, just like anything else, it’s impossible to guarantee that they will always find you the best deal possible, but the likelihood of this happening is considerably higher than it would be if you completed the entire process on your own.
  • Estimates Aren’t Always Guaranteed – The mortgage broker is the “middle man” meaning they communicate your requirements and details to a lender, before coming back to you with an estimate. However, the estimate provided initially won’t typically be a “firm estimate” and they won’t likely provide one until they receive your actual application for the loan. So be wary when mortgage brokers discuss the estimates they provide with you since they typically have no way to guarantee these estimates and the terms and rates could be subject to change.

Every years millions of people in Colorado and the rest of the US decide that the pros outweigh the cons when it comes to mortgage brokers but don’t let that influence your decision. Take some time to determine the best option for your individual situation, and if you want some help from the leading real estate agent in Denver, don’t hesitate to contact us.

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