If you’ve been renting in New York for quite some time the dream of owning your own home might always have seemed like an impossible one. But, perhaps, over the years, through savings and wise investments, that dream has moved just a little bit closer to reality. And now, remarkably, you’re ready to take that final step, to leave the world of renting behind and embrace mortgage repayments and interest rates. There’s only one problem, how can you be sure you are getting the best deal? That’s where a mortgage broker can help.
At its most basic, a broker’s job is to find the potential homeowner the best terms and the cheapest rates. In essence, they are working as an intermediary between the lender and the borrower. They are also regulated to ensure they comply with the financial laws in that particular area, although the amount of regulation is entirely dependent on the area.
A mortgage broker’s specific dealings aren’t confined to retail banking. They can also help small businesses, larger corporations and investment banks find the deal that is right for them.
The specific work they undertake will be slightly different depending on the client, but it will probably entail some, if not all, of the following:
- Assessment of the borrower’s finances and credit history.
- Market appraisal to determine the likelihood of finding the right property for the borrower’s means.
- Handling all lending applications for the borrower.
- Explaining the legal ramifications of what’s being undertaken to the client.
- And, finally, submitting all relevant materials to the lender.
As you might expect, New York has an abundance of brokers. Like in any potential transaction though, don’t rush to make a decision on your broker of choice. Make sure to shop around first. The industry is regulated, but that doesn’t mean the quality is. Seek references, track their feedback online and try and find the best possible deal for your circumstances, without having to compromise on experience. New York is a competitive place, turn this into a positive.
The most obvious advantage is that a mortgage broker lightens your workload. They’ll do the research and applications for you. They know the market and it’s their job to find the best deal possible for you. In most cases, they’ll have years of experience and so will have relationships with lenders that simply aren’t available to a first-time buyer or small business, and thus might be able to get special rates as a result.
Which brings us to our second major advantage. Yes, you have to pay for a mortgage broker’s service, but as a result of the relationships they’ve developed with financial institutions they might be able to save you some of the pernicious fees attached to buying a house. Occasionally a broker might even be able to get a lender to waive certain financial obligations like appraisal and application fees.
Another advantage of using a broker is that they might be able to help you with other decisions connected with buying a home. For instance, they might find you buildings insurance or a suitable life insurance policy.
Another potential positive of going down the broker route is if you think you might have trouble getting a loan from a bank due to bad credit. In some cases, a broker with good contacts will be able to let the borrower know of potential opportunities they might otherwise have missed.
In some instances it is possible that a borrower might be able to negotiate a better deal with the banks, than the broker. So if doesn’t hurt to do a little research of your own, just in case. One other thing to be careful of is whether the broker is working with your best interests at heart. In some cases they will be paid a fee by the lender to bring in new business, so it is possible there will be some conflict of interest. However, in most cases if it transpires that you have been sold a mortgage on false information, you are able to make complaints and have the issue looked into.
In some cases it is also possible that a lender will offer you an estimate of the final deal, rather than the final deal itself. In these instances it is possible the lender will have changed the terms of loan once they’ve seen your application and offer you a more expensive deal as a result.
The final point to mention is that some lenders in New York might not work with mortgage brokers at all. There has been an increasing trend in recent years of financial institutions only engaging in direct lending, so it’s possible that a small percentage of the market will be closed off to you.
The simple difference between direct lending (going straight to a bank) or using a mortgage broker is expedience. A mortgage broker will save you time. And, if they’re any good, they should also be able to save you money too. The one exception to this case is possibly when a borrower is looking for a smaller loan, and so removing the intermediary could potentially speed things up a bit.
Buying a home is a huge commitment. It’s something that most of us have been dreaming about for years, so when we finally make the leap into the property market we want to be sure we’re getting the best deal possible. At Simple Fast Mortgage, we’re here to make that process as easy as can be. We work tirelessly to ensure we get the best deal for you and make sure you’re kept in touch on every step of the way.
If you have any questions about mortgage brokers, or anything connected with mortgage applications, or simply want to know a little more about the process, please don’t hesitate to get in touch. At Simple Fast Mortgage we’re always happy to help.