Finding the Right Mortgage Broker as a First Time Homebuyer

Deciding to buy a new house is a big step. When everything is all said and done, it’s a rewarding endeavor, but the process itself can be daunting. One of the biggest challenges for first-time homebuyers is taking out a loan. Knowing the ins and outs of borrowing can feel like a full-time job itself…and for mortgage brokers, it is.

Mortgage brokers help you identify and assess your various lending options, connecting you with the right bank or lender for your specific needs. This process can be of great benefit to first time home buyers, but only if you choose the right mortgage broker.

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Ideally, you want a broker that is knowledgeable, accredited, and offers you access to a wide range of lenders. Here are a few tips to make your search easier.

Get Recommendations from Other Buyers

One of the best ways to narrow down your search is by soliciting recommendations from your personal and professional networks. Friends, family members, colleagues, and neighbors are good places to start. Of particular relevance are people who are (or were) in a similar situation. Another great source of information is your real estate agent. As real estate professionals, they will likely have a vast network of connections in the industry. They also have a vested interest in helping your home buying process go off smoothly.

At this stage, the main goal is simply to gather as much information as possible. Some potential questions you can ask your network include: “Are you satisfied with your mortgage broker?”, “Do you know of any mortgage brokers with good reputations?” or “Why did you use a mortgage broker instead of a lender?”

Research Mortgage Brokers Online

These days, most reputable mortgage brokerages have an online presence of some kind, even if it’s just a LinkedIn profile or online portfolio. Sites like lendingtree.com or zillow.com are good, industry-specific sources of information.

One key thing to look out for is the broker’s reputation, which can be quickly assessed via online reviews. If you’re doing a deep dive, you can view the online registry at The United States’ Nationwide Mortgage Licensing System (NMLS) to check if your targeted broker has been the subject of any punitive actions.

When searching for info online, be wary of outdated information – rates posted in 2010 might not be currently honored.

Schedule Interviews with 3+ Brokers

After obtaining referrals and checking reviews, you have enough info to take the next steps in your search and start scheduling interviews. To maximize your chances of finding the perfect fit, we recommend scheduling at least three interviews, ideally within the same week.

The specific questions asked are up to you, but it is usually a good idea to ask the same (or similar) questions in each interview. This mirrors a common tactic used in job interviews and makes it easier to weigh your options against one another.

Inquire About the Application Process

Many mortgage brokers these days offer online mortgage application platforms. These can speed up the process, but it’s important to you understand the specific requirements. Don’t hesitate to ask about credit score, down payment, and debt-to-income ratio requirements, as well as average closing time and all documents needed throughout the process.

It’s important to avoid applying for too many mortgage loans, particularly within a condensed time period, as this can have a detrimental effect on your credit score.

As About Rates, Fees, and Points

It is important to work with a mortgage broker that is upfront about their rates, as this makes things easier for you to understand and helps build trust. As a general rule, vagueness is not good when it comes to business.

Mortgage brokers get paid in ‘points’ – typically as one percent of your mortgage rate – or through a commission fee. Typically, what’s good for you is also good for the mortgage broker, but this is not always true. This is a service industry, so brokers who put their own needs first should be avoided at all costs.

A great way to identify good brokers or brokerages is through the number of options they present you with. Multiple options indicate the broker is trying to help, rather than pressuring you to commit. 

Look for Brokers Who Ask Questions

As surely as you should be asking your broker questions to identify your potential fit, your broker should be asking you questions to better understand your financial situation and deliver their service. Without knowing your financial history and home buying goals, it’s difficult, if not impossible, for your broker to find the perfect rate for your situation.

If Broker A parrots out a list of rates verbatim. Broker B shows an active interest in your situation. Who do you think will help you secure the best loan?

Prioritize Trust and Accountability

Trust is key to any professional relationship. You wouldn’t go to a dishonest dentist or hire a lying plumber to fix your pipes. This is just as important when it comes to mortgage brokers. Buying your first home is a big investment, and you want to make sure that your broker is supportive and helpful throughout the process. 

A good personality cannot replace knowledge and competency, but the opposite is also true. When interviewing brokers, prioritize people that are personable, generous, and trustworthy, as well as informative and professionally competent.

Your dream home awaits…

Congratulations – by simplifying and optimizing your mortgage broker search, you’re now one step closer to finding the perfect first home for you and your family. 

Any questions or comments about the article? Let us know in the comments below. Thanks!

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