You may even know him as a mortgage broker. But what does he do? Why he is better than other mortgage brokers in your area? How can he help you buy your first home? Here are answers to these questions and more.
He is certified by FHA. FHA, or the Federal Housing Administration, is an agency of the U.S. government. If your lender has one, it is automatically approved by FHA. FHA doesn't just approve mortgages.
As a real estate agent, your job is to find a home for sale and negotiate the purchase price with the seller. He should do this before the client gets the mortgage. Next, the broker must close the deal, usually through a referral from his client. The broker must ensure that both he and the client are properly covered by insurance so that neither can be held liable if there is a problem with the transaction.
A broker cannot represent more than one mortgage lender. Any broker can get as much as 25% commission from a sale. Because the FHA insures the mortgage, the broker is protected if the company goes bankrupt. His fees are limited to two percent of the mortgage amount.
He is licensed and follows very strict guidelines. This helps ensure quality service. Moreover, if you choose to go with an expensive broker, he has an incentive to get you to log in with him instead of another broker. The real estate agent who gets the best deal for his clients gets referrals and more business. This is a win-win for everyone.
A good broker will help you negotiate the best possible deal for your mortgage.
The mortgage lender will be impressed with his ability to negotiate fees, penalties and all costs associated with the loan. Your broker should also be able to show you what it means to have a lower monthly payment and less interest. A broker will show you all the mortgage offers before you choose the one that suits you. The right broker understands that there are costs associated with all offers. He can explain those fees and help you avoid unpleasant surprises once the mortgage is finalized.
You can ask your broker about all the services he or she offers, how they can help you and any other questions you may have. Before you agree to anything, look around. Compare the fees and services of each broker to see which one offers you better value.
Realtors can sometimes be difficult to work with. They can all be wrapped up in processing the loan and forget about handling other aspects of your home buying process. They may forget to call you back if an offer is available and have missed a payment for the house. Always remember to ask your broker many questions so that you feel comfortable working with them.