KNOW WHERE TO SHOP BEFORE HUNTING FOR YOUR MORTGAGE
Many people shop for a house before getting approved for a mortgage but if you do it the other way around it may make real estate shopping far easier.
Before you jump into the Multiple Listing Services to look for your starter home or even your dream home get your mortgage sorted and for that you will need either a mortgage broker or a mortgage lender.
What’s the Difference between a Mortgage Lender vs a Mortgage Broker? There are so many terms thrown around in the finance world that it can be hard to figure out what means what.
A mortgage lender lends money, while a mortgage broker finds money.
Here we’re going to talk about the differences and roles that these two play when you’re trying to finance or refinance your home, and you’ll be able to enter the process with your eyes wide open.
You’ll be able to see through the curtain and different tactics so you make the right decision for your financial future instead of theirs.
Let’s get started.
What Does A Mortgage Lender Do?
Unlike your local Toronto mortgage broker, a mortgage lender lends you money. This could be a bank, a credit union or a private mortgage lender.
You’ll have to fill out a mortgage application with them, then you’ll have to go through a whole process where they tell you they either want to work with your or not.
This can be a stressful process, but in the end you’ll either get the financing that you need to buy a home or you won’t. It’s a very binary procedure.
Depending on what kind of mortgage lender you select for your mortgage, you’ll have a different experience. If you have bad credit and use a private mortgage lender you may have a better experience.
On the other hand if you have great credit and go to a conventional mortgage lender you could have a bad experience.
It’s all about how you fill out the mortgage application.
What Does A Mortgage Broker Do?
A mortgage broker is your intermediary between you and the mortgage lender. You shouldn’t have to deal with these people directly; they’re better equipped for the situation that you ever could hope to be.
You need a skilled negotiator who can help you make the most of your application. They’ll be able to help you look at what’s wrong and what’s right and answer any questions that you may have.
There are so many things that can go wrong with your application so it’s imperative that you have someone to help you. If you’ve never filled out a mortgage application on your own before their help can be invaluable. Don’t lose out on a good thing just because you’re not sure what to do.
How Does This Help You?
Depending on what kind of circumstances you have, you’ll need to go about the mortgage process a specific way which means talking to the right person.
If you’re a Canadian with bad credit for example you may want to talk with a mortgage broker to see if there are credit repair procedures that you can do to get a better result. Taking a bad credit score and working on increasing it before getting a mortgage will get you a better interest rate in most cases because you are deemed reliable.
If you’re someone with a great credit score you may want to talk with a private mortgage lender to see if you can get better terms which again will save you money in the long-run.
Just because you have good credit doesn’t mean you’ll want to go with a conventional mortgage lender. It’s all about what your situation is and what you need for your case. Talk with a mortgage broker today and see what is right for you before you jump in head first only to be disappointed by the outcome.
Contribution Post: Mike Smith is a mortgage broker and avid blogger for Home Base Mortgages. HBM is a Toronto mortgage broker that provides home mortgages, mortgage refinancing, home equity loans, debt consolidation, private mortgages and second mortgages
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