Friday mortgage Q&A: “Why use a mortgage broker?”
If you’re in the market for a new mortgage, whether it be a purchase money mortgage or a refinance, you may be wondering how to go about it all.
Assuming you’ve heard the phrase “mortgage broker” thrown around, you may also be curious why anyone would use a mortgage broker.
Lower Rates
Mortgage brokers have access to wholesale mortgage rates, which are priced below those offered by retail banks.
They’re able to offer lower mortgage rates because they don’t need to pay a sales team to sell those rates, as mortgage brokers run their own businesses and earn money off commission (yield spread premium).
That said, you may be able to get a better deal if you work with a mortgage broker as opposed to walking into your local bank branch.
Rate Shopping
Not only that, but mortgage brokers have the ability to “shop your rate” with multiple mortgage lenders simultaneously, meaning more options for you and less legwork.
And a report recently revealed that about 60 percent of mortgage borrowers receive just a single mortgage quote, which surely doesn’t make a lot of sense if you’re looking to get the best deal.
Customer Service
Finally, a mortgage broker may be able to provide better customer service than a giant, faceless corporation.
Many mortgage brokers are mom-and-pop shops, so it’s easy to get someone on the phone or speak in person.
They also tend to hustle a bit more with their commission on the line.
See also: Mortgage brokers vs banks
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