Do You Need a Mortgage Consultant?

Are you getting ready to buy a home?

If you’re in the planning stages, you’ll want to have the main things ready to go. You’ll need a mortgage, real estate agent, and you need to get your financial house in order.

A lot can happen between the offer and the home’s closing that can cause the deal to fall through. Your ability to get a home loan is one of them.

A mortgage consultant is one person who can help you get that transaction to close. There is more than $8.8 trillion in mortgage debt in the U.S. That’s because the housing industry recovered from the 2008 crisis and more people are buying homes again.

Do you want to know if you need a mortgage consultant for your home purchase? Read on to find out what they do and how to decide if you need one.

What is a Mortgage Consultant?

A mortgage consultant is often a title that’s put on a business card to make a person look rather important. It’s often used interchangeably with other titles like mortgage broker and mortgage lender.

When you’re buying a home, you’re really relying on a team of people. Inspectors, real estate agents, escrow officers, and lenders all contribute to one transaction.

Here are the people that you’re likely to come across when you’re looking for a home loan.

Mortgage Brokers

A mortgage broker is a person or team of people who work to secure a home loan on your behalf, like these mortgage brokers. They work with a variety of lenders to get the best mortgage that fits your needs.

They’ll examine the entire terms of the deal, from the interest rate to monthly payments, to the reputation of the financial institution.

Mortgage brokers are like a concierge service for financing your home. They make sure that your paperwork is correct and accurate. They can also give you advice to make sure the deal closes without a hitch.

For example, did you know that a home loan may not close if you take out credit cards or change jobs before a home closes? This is often why deals fall apart, even if a loan is preapproved.

Mortgage Lenders

Mortgage lenders are usually tied to one financial institution to secure your home loan. They don’t have the ability to shop around at different banks like mortgage brokers do.

However, if you’re comfortable shopping around for a loan yourself, this could be a great option to get your home loan. By working with a mortgage lender, you’re removing the middleman and working directly with the bank.

Lenders and brokers are required to hold a license in the state where they operate. No matter which one you decide to work with, you need to make sure that you are working with one that is licensed.

Things to Watch Out for When Working With a Mortgage Broker

Working with a mortgage broker is incredibly convenient. If you’re going through your first home purchase, they can be an indispensable part of your team. They can guide you through the process

One potential disadvantage to working with a mortgage broker is that the financing of your home loan depends on how well your broker communicates with you and your lender.

A mortgage broker that fails to communicate with you or your lender in a timely fashion could cause the whole deal to fall through. It’s up to you to make sure that you hire the best mortgage consultant who has excellent communication and project management skills.

Mortgage lenders also have to get paid somehow. They will usually earn a commission from the lender that’s 1-2% of the loan amount. Another way they get paid is if you pay the loan origination fee directly to the broker.

With these potential pitfalls in mind, you have to weigh the pros and cons of working with a mortgage broker. Something like a small fee can well be worth the guidance and peace of mind in the home buying process.

How to Find the Right Mortgage Consultant

There’s a lot at stake when you’re financing your home. You want to make sure that your dream home doesn’t fall through because you chose the wrong mortgage broker. Here are some tips to help you find the best mortgage broker.

Ask Your Real Estate Agent

A good real estate agent already has relationships with mortgage brokers. They are likely to have a preferred lender that they can trust to get the job done.

Get Three Names

You never want to go with the first name that comes up. That can be a recipe for disaster. Instead, get at least three names of mortgage brokers to work with. Take the time to interview them.

You’ll want to find out how much experience they have in the industry, the banks they like to work with, and the types of loans they specialize in. Some lenders love to work with VA loans while others like to work with financing investments.

Finally, read the online reviews of various lenders. That will tell you a lot about the service you can expect to receive.

Buy Your Next Property with Peace of Mind

Buying a home is one of the most stressful experiences that you can go through. There are so many moving parts in the transaction, it can be very difficult to keep track of everything, including the home loan.

A mortgage consultant can be a valuable help in getting the financing to go through and the home to close on time. Whether they’re called a mortgage lender or a mortgage broker, they can help you get your paperwork filled out properly and get you the best deal possible.

Do you want to know more about getting the best rate on a home loan? That will largely depend on your credit score. Check out the credit score section of this site to get tips to increase your credit score and lower your home loan interest rates.