Obtaining a mortgage is a rather time-consuming procedure, for which the borrower needs to fulfill the numerous requirements of the bank and collect an impressive list of documents from various authorities. To simplify this process, the client can use the services of mortgage brokers.Professional mortgage broker in California act as intermediaries between the bank and the borrower and assist in obtaining a loan.
What problems are the most common?
Despite its popularity, mortgages are not available to everyone. Often, registration is accompanied by such difficulties as:
- Refusal in several banks. The reason for a negative decision is usually insufficient income, lack of required work experience, unsuitable property (non-accredited new building or dilapidated second home) and poor credit history. To get approval for a mortgage, the client can contact mortgage brokers or independently find the bank that imposes minimum requirements for borrowers and housing.
- High rates. Interest rates and expenses that the borrower will incur differ depending on the bank chosen. The broker sends a request on behalf of the client to several credit institutions and, as a result, offers him the option with the most favorable conditions.
- No own savings. In this case, you need to choose the bank that issues loans for the purchase of housing without a down payment, or contact a broker. The latter will help to complete the transaction even if the borrower does not have the required amount.
- Also, difficulties in obtaining a mortgage may be associated with the collection of documents, filling out questionnaires, attracting co-borrowers, selecting the loan term and the desired banking product. These and other problems that arise when obtaining a home loan can be solved with the help of brokers. If the client contacts the bank directly, he can count on qualified advice from the manager. However, at the same time, he will have to prepare documents and eliminate all mistakes made on his own.
What services do brokers provide?
Assistance in obtaining a loan, which is provided by real estate agencies or independent brokerage companies, consists of a certain set of ancillary services. As a rule, it includes:
- Selection of a banking product that suits the requirements and financial capabilities of the client (calculation of the monthly payment and debt repayment schedule). Brokers are aware of the mortgage conditions in several leading banks, so they can advise the client on the most profitable option and tell about the nuances of the mortgage agreement.
- Applying on behalf of a client. Intermediaries will help fill out an application form and advise the borrower on issues that have arisen in the process of collecting documents and signing a loan agreement.
- Calculation of the real value of the mortgage and registration costs (appraiser’s services, insurance policy payment, state duty).
- Assistance in finding a property suitable for the conditions of the bank, and preparing documents for it.
- Accompaniment of the purchase and sale transaction.
By contacting the bank personally, the client can also choose a profitable mortgage program without involving intermediaries. Bank employees assist their clients in lending, namely, advising on all emerging issues, calculating the maximum amount and amount of the monthly payment, preparing an agreement, providing a list of necessary documents that he must collect on his own.
The amount of remuneration that a credit broker will receive depends on what tariff he works at. Thus, the payment for intermediary services can have a fixed amount or be calculated as a percentage of the amount of the issued housing loan. On average, this figure ranges from 1 to 5% in the market.
According to the service agreement, the intermediary receives remuneration for assistance only after the approval of the application and the successful issuance of a loan. Banks do not charge a commission for the transfer of mortgage funds and paperwork.