How Do You Find A Home Loan Broker You Can Trust?

Where do You Start Looking?

When most consumers start thinking about making the leap to becoming homeowners, they’re starting off with a distinct shortage of information about the home buying and financing process. Finding a loan broker that can help isn’t easy without a little guidance. In order to provide the help that first-time buyers need, we’ve put together this basic guide to selecting a broker that will treat you right.

It’s no understatement to say that the home mortgage business has gone through major upheavals in the last few years. A lot of brokers closed up shop during the recent financial crises. The brokers who weathered the storm and continue to offer their services today are still around because they make outstanding customer service their top priority. One of the biggest benefits they deliver is laying out a clear, step-by-step approach to home buying for their clients. Here’s one example of the sort of path a good broker will lay out

Budgetary Planning

1) Figure out what kind of mortgage you can afford. Keep in mind that mortgage payments are not the only housing expenses you need to deal with on a monthly basis. There will be maintenance costs, insurance premiums, property taxes, and more. Plan out your monthly budget in detail and don’t get too optimistic about how big a mortgage payment you can handle. You’ll find a lot of helpful calculators online that will crunch the numbers for you when you want to start with a monthly payment and end up with a total sum for a mortgage.

Thoroughly Understanding Interest Rates

2) Pay attention to interest rates. Mortgages are large loans with long repayment terms; minor rate fluctuations can lead to dramatic changes in their overall costs. Speak with your loan officer about how rates are currently behaving. It may be possible to lock in the interest rate your lender quoted to you, which protects you against unexpected rate hikes before you settle on your new home.

Choosing the Right Broker

3) Pick your broker wisely. A good broker should be an educator as much as a financial professional; you want someone who can teach you about your various mortgage options and guide you towards the products that best suit you. Be aware that the brokers with the lowest rates probably won’t necessarily be the ones with the best service or the most informative ones. It can be worth it to pay extra for a more helpful, approachable broker.

How Much Cash will You Need?

4) Start pulling your down payment together. A first mortgage always requires a down payment. If your loan is structured to require less than 20 percent down, you’ll also need to purchase mortgage insurance. This shields your lender from the risk of default.

Organizing Your Paperwork

5) Collect your paperwork. Applying for a mortgage requires a lot of documentation. Make sure you’ve gathered everything you need – bank statements, pay stubs, tax returns, etc. – in advance. This avoids irritating delays in the lending process.

The road that leads you to your dream home may be uncharted territory for you, but a good loan broker can draw you an excellent map. You’ll get a clear and safe route to purchasing a home. A good broker will steer you well away from the common pitfalls waiting for first-time buyers.

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