Why Use a Mortgage Broker?

You are finally ready to buy a house and like most folks, you need a mortgage. Traditionally, big banks beckon, but increasingly people are seeking out mortgage brokers for more personal attention and expedited service.

Mortgage brokers work as intermediaries between homebuyers and lenders to find customers the best mortgage for them.

Find out how AAA can help you with your mortgage.

Mortgage Brokers vs. Banks

Consumer appetite for mortgage brokerage services has been growing and is anticipated to increase significantly in the coming years, according to a recent report by Allied Market Research.

The demand for mortgage products is highly dependent on the loan interest rates and housing market, according to Steven Vieira, AAA Northeast’s director of mortgage sales and operations. “Although both are severely depressed right now, it’s expected to turn around dramatically in the summer when the Federal Reserve begins to lower interest rates for the first time in several years,” he added.

When you compare AAA mortgage brokers to big banks, the two experiences are vastly different. “We have wholesale rates versus the retail rates,” Vieira explained. “Big banks have behind-the-scenes costs. We can access those same programs without the extra costs.”

AAA is paid by the lender for its services, Vieira said. “This covers our expenses.” The borrower still has traditional closing costs like attorney’s fees, title insurance, appraisals and recording fees.

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Choices Make Choosing a Mortgage Easier

The biggest advantage of mortgage brokers is they have access to a variety of lenders and can compare rates, terms and other factors. When people apply for a mortgage with a bank and they don’t get it, they need to find another bank and apply again, which eats up valuable time.

In Vieira’s case, if the first mortgage application he submits to a lender is not approved, he simply goes to the next lender on his list. “When buying a house, the most important thing is not the rate and closing costs, but if a lender is going to approve you,” Vieira continued. “A lot of first-time homebuyers are concerned about rate, but you want to know if a lender is going to deliver an answer to you quickly and easily, because you need to have everything ready quickly.” If the loan application is delayed or rejected, the buyers run the risk of losing the house they had their eyes on.

“The biggest thing to do is to get preapproved for a mortgage,” noted Vieira. “Sellers move fast, and you have to have your financing set.”

Learn more about how to be the best mortgage candidate.

Get Extra Help

AAA loan officers also assist members by participating in regular free homebuying webinars, where members get advice on what to look for when buying a house and ways to prepare before making an offer. “We look at the entire process,” Vieira said. “Buyers have to do more themselves now and it’s good to bring along someone who knows what to look for.”

Mortgage brokers are required to keep up with industry regulations. New requirements for mortgage brokers were developed after the 2007-2009 financial crisis, when thousands of foreclosures flooded the market, primarily due to banks and brokers approving home loans people could not afford.

Now brokers now need to take courses to earn certification, and according to Vieira, are held to a high standard. “With a mortgage broker, the federal government wants to make sure the education is up to par.”

Regulations passed after the housing market collapsed in 2009 outlawed many subprime mortgages, established separation between the appraisers and the lenders and created a licensing and registration system for all loan officers, according to Vieira.  “The reforms have stabilized the mortgage industry and made it much more resilient against challenges,” he said. “When you look at the whole industry today, it’s so much better than before.”

Schedule a meeting with an experienced loan officer or start your mortgage loan application online today.

Have you ever used a mortgage broker? How was your experience?