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Mortgage Lender: Do You Really Need One? This Will Help You Decide!

Anyone who wants to eliminate some of the legwork and stress from the mortgage process should consider working with a mortgage lender. Brokers, on the other hand, might be especially beneficial to first-time homebuyers who require further assistance.

Buying a home for the first or third time is stressful but more so if it’s your first time. You really don’t know what to expect and that’s the scary part. It helps if you know what to ask. That way you can be confident of the answers you get from your mortgage lender. If you have prior experience buying and financing real estate and are comfortable searching for a mortgage on your own, working without a broker may save you money.

Mortgage Broker Vs. Mortgage Loan Officer

Mortgage brokers are financial specialists that deal with a variety of lenders to provide consumers with a variety of lending options. For a fee or commission, these brokers match clients with mortgage lenders and lending packages that best fulfill their needs.

A mortgage lender works for a specific bank or direct lender and is only allowed to promote mortgage products supplied by that institution. As a result, mortgage brokers provide clients with access to a considerably broader range of lenders, including smaller facilities that may provide better terms than traditional banks.

Get Pre-approved for a Mortgage Loan

As a potential home buyer, you should consider your budget before you begin looking for a home. So, sit down and work out a good budget to know what you can and cannot afford. It will make your search less stressful. You don’t want to set your sights on a home you can’t afford to live in. Ask the mortgage lender to get your pre-approved so you can shop realistically.

How to Prepare

Make sure you're financially able to take on a loan and get the best rate available. Make out a budget before you start applying and seeking mortgage pre-approval. You should prepare for your mortgage loan application by doing the following:

  • Checking and improving your credit score several months before you apply for a mortgage loan. Pay off credit card balances (but don’t close the account), make payments on time.
  • Save for your down payment. Although you should aim for a 20% or higher down payment, you can get approved for a loan with as little as 3% down, but you must be able to manage the monthly payments.
  • Make sure you have a stable income. Mortgage lenders want to make loans to people who can pay. Banks and credit unions are in the lending business. They do not sell real estate.

How to Find the Best Mortgage Lender

Finding a mortgage provider is now easier than before. On lender and rate aggregation websites, mortgage rates are readily available. Many lenders aggressively advertise their rates to attract buyers to their website. What else can you do? Use a few of these questions when interviewing potential lenders:

  • What are the mortgage terms?
  • Is the application process lengthy?
  • What are the credit qualifiers?
  • Do you need to set up an escrow account?
  • How much experience does the lender have in the industry?
  • What are the odds of getting approved for a mortgage loan?

Start your home loan search at the banks or credit unions where you have accounts. They may offer special rates and fees for their customers. It's also simple to do your research for lenders online. Look at websites that compile information about reputable mortgage lenders.

Lastly, ask your friends, family, and real estate experts for recommendations. They may be able to recommend a lender or broker they know. But to answer the initial question, you really need  one… a mortgage lender. 

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