When you find the perfect house on the real estate market your purchase is often “subject to financing”, so you may seek the services of mortgage brokers. Sometimes your request for a mortgage has been declined at your own bank. Perhaps they don’t like your credit rating or the amount of your income. But still, that house is so perfect, you’d like to get a mortgage.
Sometimes financing through the family is possible, though not always the best choice. Sometimes a credit unions will grant loans to members, particularly if there your retirement savings are there. If not, that’s when you need a mortgage broker.
Their job is to look for the deal that suits you best. Most of the time you want the best term and the lowest interest rate. The term is described as the amount of time when your interest rate does not change, perhaps five years. An open mortgage or variable rate can be chosen but could be risky if the interest rate goes up.
If you are unfamiliar with the banking and finances world, and most first time home buyers are, it’s wise to get help from those in the business. By sitting on those not yet comfortable chairs you are setting up a middle-person between you and the financial institution that will be finally chosen.
The economy fluctuates and when there are many home purchases the banks will want to offer the best rates in order to get your business. Perhaps you were turned down by one bank, but others will see you as a reasonable risk for a mortgage. The brokerage helps to simplify the process for you.
Once a match is made it’s critical that your agent spend sufficient time with you to explain the many details of borrowing and the long term repayment. It’s important that you should go home with a sense of trust of your agent. There are many decisions yet to make.
There many brokers, especially in a large city. If the situation is new, you will have to do some research to find the best person for you. The yellow pages will list them. Your Realtor may have some referrals, friends and family may know some good, or not good fellows.
There are different regulations for different provinces, states, or countries. Your own bank, even if they turned down your loan, can offer some information on brokerage rules. In most cases the people you deal with will be trustworthy. Be sure that you understand any fees that they will charge. Ask about possible penalties for late payments, “bounced” checks, or insufficient funds for automatic withdrawal from your bank account.
Usually the purchase of a house is the biggest financial decision of their live. It’s usually a sensible purchase but borrowing the money requires many decisions. People would be wise to read all the small print, however long it takes, and not hesitate to ask questions. The answers are more easily remembered if written down. Too much rushing can be expensive.
When you have, perhaps even with a bit of nervousness, signed on the bottom line, thank those at the mortgage brokers office, phone up your Realtor and contact the moving people.