First-Time Buyer? What You Should Know About Mortgage Brokers

Buying a home is a major financial commitment for many people. Not only are mortgages the largest source of debt for many, but they also take years to pay off. Mortgage terms can range from 15 to 40 years, with 15-year and 30-year terms being the most common for both fixed-rate and adjustable rate mortgages. All of this may seem daunting if you are a first-time buyer. Having a mortgage broker there to help you select your first home loan can be helpful. Here is what you should know about mortgage brokers.

What They Do

When it comes to choosing a lender and taking out a home loan, it can be tempting to do it yourself. While it's certainly possible to find a mortgage on your own, a mortgage broker can still be very helpful. Mortgage brokers are essentially there to connect you with a lender. Instead of you needing to do all of the legwork when it comes to choosing a lender, a mortgage broker does it for you. They are the middlemen between you and various lenders. 

They Can Help You Find the Right Mortgage

When it comes to finding a mortgage, there are a lot of factors to keep in mind. Of course, the lower the interest rate, the better. There are also other things to consider such as fees and other costs related to taking out a home loan. A mortgage broker does the shopping and comparing for you in order to find the lowest interest rates possible. They may even be able to get some lender fees waived as well saving you more money. If you have a lower credit score or other issues that may make finding a mortgage difficult, a mortgage broker may be able to help.

The Cost

Another thing that you should know about mortgage brokers is how they are paid. They most often charge something called a loan origination fee. This fee is a percentage of the loan amount. Typically, the loan origination fee is between one and two percent of the total value of the loan. While that may seem steep, hiring a mortgage broker can save you a lot more. If you are unfamiliar with the process of taking out a mortgage, a mortgage broker can help you find a better deal than you would be able to find on your own potentially saving you thousands of dollars.

Buying a home for the first time and taking out your first mortgage can be challenging. However, a mortgage broker can help. As a first-time home buyer, you should be aware of what mortgage brokers do and how they can help you find the right home loan for your needs. Costs can vary; however, most brokers charge a loan origination fee between one and two percent. 

For more information, contact your local mortgage broker today.