Using Multiple Home Loan Brokers

Using home loan brokers can be a great time saving convenience. Not only can you save time, but usually money as well. Before you decide to use several brokers there are some basic things you should know. Keep in mind that once you apply, you can only apply with one broker. Make your choice wisely and ask lots of questions.

Research First

A broker won’t be paid until the loan has been originated and closed. It shouldn’t cost you to work with one or two and find the broker that is most helpful and suits your needs. For a borrower with less than perfect credit, a broker may have more access to lenders that will work with you. If you’re credit isn’t an issue, than a broker can help beat the average rate. Call around and see what kind of rates you can get without a broker. You don’t need to go through extensive research, just get a few figures. Then see what a mortgage broker can offer you.

Advantages of Multiple Brokers
Now that you’ve researched and discovered that a broker can help you, it may be a good idea to find more than one broker to work for you. Some mortgage brokers have only a few relationships, while others will have an extensive list of lenders they have had success with. Working with several brokers will allow you to find the best terms for your new mortgage. You can also look at things like down payment amounts, the broker fee’s associated with closing, and compare these things against the brokers you are using.  You will also be able to find several programs you may fit in to by using multiple brokers. For example, not all brokers will work with government sponsored loans, and this may be something you want to check in to.

Disadvantages of Using Multiple Brokers
With every positive, there are always negative aspects as well. For one, a broker may not want to work with you if you tell them you have other brokers as well. The logic for this is simple. Just as you are trying to the best thing for yourself by saving money, they are in business to make money. Working with other brokers means that only one of them is going to make money off you, in turn wasting the time of the other brokers. You may want to keep it to yourself if you are going to use more than one broker. This will give them more of an incentive to keep your best interest in mind.

Another downside to using several brokers has to do with your credit report. Every time your credit report is pulled it shows on your credit. If you are going to use several brokers you want to try to have all the reports pulled with in the same week. This will help prevent a drop in your score, which can affect the rates you qualify for.

Working with multiple brokers will generally work to your advantage. Take some time to research and pick a few you want to work with. There is nothing wrong with shopping around when it comes to a home mortgage.