5 Benefits to using a Mortgage Broker
5 Benefits to Using a Mortgage Broker
Article by John Csaszar, November 7, 2013
Are you thinking about buying a new commercial property, multi-family property or looking to refinance your existing loan? Have you started exploring your financing options for the project? There are many different types of loans available to select from, but one of the first things you will need to determine is whether you want to work with a Commercial Mortgage Broker or with a bank or a single lender. Here’s a look at some of the benefits associated with working with a Broker rather than a bank.
Benefit #1: A Broker Works for You
One of the greatest benefits to working with a Commercial Mortgage Broker rather than a bank is the fact that the Broker works for you. When you go to a bank or a lender to secure a mortgage loan, the bank specialist is solely concerned with the interest of the financial institution. The Mortgage Broker, on the other hand, is looking out for your best interest and can provide hundreds of different, creative options for you to use in financing a property. You truly benefit because Mortgage Brokers are not employees of a particular bank or lender, but instead have a working relationship with dozens of these institutions.
Benefit #2: Choose from a Wider Variety of Institutions
When you go to a bank to inquire about a mortgage loan, the bank specialist is only representing one financial institution. When you work with a Mortgage Broker, he or she works with a wide variety of different institutions. As a result, you have a broader range of loan options to select from. Not only can this help you to get the best rates, but it also increases your chances of obtaining approval even if you have poor credit.
Benefit #3:Brokers are Highly Trained
When looking for funding, it is vital to secure the best financing available. Every borrower is unique and every lender has its own rules and programs. The difficulty most people have in shopping for their own loan is they don’t know all the right questions to ask. Adding to that difficulty is the fact that most lenders have only two or three programs to offer so their job is to sell you what they have rather than find the program that fits your needs. Many times clients go to banks and they get offered one rate but get re-traded down the road and the program changes.
A good Mortgage Broker will do their best to make sure the quotes you are getting are the most current and aggressive the market has to offer and they will get quotes from the lenders directly to insure accurate quotes. They will underwrite the deal up front and make sure the lenders have a full package. The more information they receive and put together, the more accurate the quote can be deliver. It is the brokers business to know the financing market and call their lending sources daily to make sure the rates and programs they offer the client are the most accurate and aggressive in the industry.
Be sure to find a broker that does not charge up-front fees. Paying any upfront fee to a broker or to list your business-financing request with a network yields disappointing results. Once a service like this has your upfront fee it becomes a financial loss to them to further market their services and your funding request to lenders or investors. Their marketing expenditure goes into increasing the number of lending opportunities they have since that represents profits, while building and maintaining their lending network and providing you with success, represents a loss.
Benefit #4: Reducing Credit Report Inquiries
Each time your credit report is pulled by a lending institution, your credit score may take a hit. When you work with a broker, your credit report only needs to be pulled once in order to recommend the best options. If you go to multiple banks, on the other hand, your credit report will be pulled each time you inquire into a loan, which will lower your credit score.
Benefit #5: Submit Your Information Only Once
After you have submitted all of the necessary information to your Mortgage Broker, he or she will pass all of the required information on to the MortgageLenders that might be a good fit for you. You are able to submit your information to multiple lenders while only filling out the necessary paperwork one time.