When you buy a house, you usually have to take out a mortgage. To do this, you have two options: deal with a broker or directly with the top mortgage lender in Texas. What is the best option?
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What are the differences between a mortgage broker and a mortgage lender?
The top mortgage lender in Texas represents the financial institution that lends you the amount of your mortgage. The broker, meanwhile, is essentially an intermediary between you and the top mortgage lender in Texas. Although complementary, their roles are very different.
Role and Benefits of a Mortgage Broker or Real Estate Broker
A mortgage broker is a financial expert at your service. His role consists of:
Draw a portrait of your budget and your real estate project;
Shop an optimal mortgage
Stay available both before and after signing your mortgage.
Let’s look at these elements in more detail.
A mortgage broker is interested in you: the more information he will have on you, the better. Why ? By having a global portrait of your situation, he will be able to:
Better guide you about the various mortgage products available on the market;
Offer you solutions that minimize the interest paid ;
Negotiate optimally with financial institutions, relying on a complete file.
To know your situation, your broker will establish, among other things, your ability to pay (how much do you earn, do you benefit from stable income?). It will also check your overall debt ratio , that is to say all of your debts: auto loan, credit cards, debt payments, etc.
In addition, do not hesitate to inform your broker of your real estate projects : do you want to live in the house or condominium for a long time, or sell it quickly? What type of property do you want to buy? These details will influence the characteristics of your mortgage (term, amortization, fixed or variable rate, etc.).
This information also allows him to offer you the best products on the market, such as first-aid programs or the RAP (Home Ownership Plan). Your broker is an excellent popularizer: passionate about his job, he will take pleasure in explaining you the different possible options.
With your information in hand, he is shopping for your mortgage with more than a dozen financial institutions in an efficient way, according to your needs.
Role & benefits of the mortgage lender (bank or private)
The mortgage lender, as mentioned above, represents the financial institution or the individual who will lend you the mortgage amount of your loan. When you contact him to submit a mortgage application, he conducts an assessment of your credit report . To do this, you must submit to an interview with a representative and complete a mortgage form.
Following the assessment of your claim, the mortgage lender decides whether to grant you a loan and determine the terms.
Note that a mortgage representative (hired by a specific financial institution) can suggest types of mortgages. However, he remains a seller. Its goal remains, first and foremost, to generate as much profit as possible.
Negotiate with or without a mortgage broker (also called a mortgage broker)?
When negotiating a mortgage, there are many aspects to consider. Each step is essential to guarantee an optimal rate.
1) Find a mortgage lender
Without a broker : it is essential to shop around for your loan. Use at least three different financial institutions. Inform each of them as completely as possible about your financial situation and your projects. For each financial institution, submit to their evaluation criteria.
With a broker : tell your mortgage broker once about your needs and goals. Allow him to explain your situation to a dozen financial institutions that he knows well and with whom he does business fluently.
Without a broker : do not hesitate to negotiate with each of the lenders all the characteristics of your mortgage:
Frequency of payments
Type of loan;
In fact, a change that seems small – a 1% interest rate cut, for example – can save you thousands of dollars.
In addition, take the time to brag about your record. If necessary, justify your requests by submitting offers that you have been offered in other financial institutions.
With a broker : The broker effectively negotiates your mortgage while you save time and money .
Its trading power gives you options that you would not otherwise be able to obtain : potentially lower interest rates, fast financing or refinancing, optimal debt consolidation offers, mortgage payments and monthly payments. less, etc.
3) When signing your mortgage
Without broker: make sure that all the agents and the elements necessary for the smooth running of the transaction are present: make an appointment with a notary, take out a mortgage life insurance if necessary, check the promise to purchase and its annexes, contact a professional in order to proceed with the evaluation of the property, etc.
With a broker : over the years, your broker has developed a network of reliable and professional contacts that he makes you enjoy during this important step. He suggests to you several notaries, proceeds to the valuation of the property, reviews with you the promise to purchase and its annexes, etc. ; what you leave in peace .
4) After signing the mortgage
Without a broker : when renewing your loan, you call a representative to inform you of the current interest rates. In order to get the best rate possible, remind them of the main elements of your situation.
With a broker : your broker knows you already and is able to offer you a personalized follow-up . Three months before the renewal of your loan, he contacts you and informs you of fluctuations in the mortgage market.
In short, a broker is a professional who greatly facilitates your contact with financial institutions. His professional training and his full time broker experience enable him to excel at all levels of the transaction .
In fact, to become a broker, he completed a mandatory college education before taking the OACIQ entrance exam. After obtaining a license to practice governed by the Real Estate Brokerage Act , he must continue continuing education.
Finally, the broker is not affiliated with any financial institution . His primary goal is to satisfy his client, who, let’s hope, will take pleasure in directing his entourage to his services. His remuneration, made by the top mortgage lender in Texas, allows him to offer his services free of charge to his clients .
In this context, it is not surprising that more and more Canadians are dealing with him. In 2009, according to CMHC , half of the buyers used a broker’s expertise for their mortgage. The statistics reveal a steady increase in demand over the past ten years.
When you take out a mortgage, private lenders and financial institutions are the two main lenders options available to you.
Financial institutions, we will not teach you anything, are the most conventional option to get a loan. They occupy the largest share of the market. There are several types of financial institutions that act as a mortgage lender: they may be banks, credit unions, etc.
Private top mortgage lender in Texas are an option of last resort. If you have a bad credit rating, or if you want to buy a property that does not meet the borrowing criteria of the bank, the possibility of a private lender may be necessary.
How it works ? Private top mortgage lender in Texas give you a loan with only interest and short term . During the short period of your loan (approximately two years), you only repay the interest. Interest rates range from 10 to 18%.
How to find a good mortgage broker or mortgage?
To find a good mortgage broker, you must be well informed and know how to compare offers . Here is an overview of the main features of a good broker.
A professional broker must hold a license issued by the OACIQ;
It makes you enjoy a wide network of contacts made up of other real estate professionals;
He is thoroughly familiar with the financial products available on the market;
He understands your projects and respects your motivations;
With him, you must feel confident : he will work with you for a long time and will be one of your best financial allies.