Independent Mortgage Advice: The Best Choice for Buyers?

independent mortgage adviceWhen you choose to work with an independent mortgage broker, you are choosing to shop numerous different banks or other financial lending institutions to secure a loan for your house. Often, working with an independent mortgage broker can be the best way to go when it comes to setting up a mortgage loan, since a talent broker will do everything in his or her power to find you a loan with terms that are fair and manageable to you. An independent mortgage broker will also help you to understand how mortgage-backed security and residential real estate loans work, though going in with a basic knowledge of each might help to make you more comfortable with the whole process. Udemy offers courses on both the United States residential mortgage business and on mortgage-backed securities in general, and both can help you to orient yourself as you consider an independent mortgage broker option.

Why An Independent Mortgage Broker Might Be the Best Choice for Your Needs 

The first point of any independent mortgage advice guide should be to explain why an independent mortgage broker might be a compelling option in the first place, as this is probably your first question. Many homebuyers or homeowners, when they decide to take out a mortgage on their property, simply head to their personal bank for the loan. The reasoning for this is, of course, completely sound: not only is it most convenient to work with a bank that you already know and visit frequently, but you may have relationships with people who work there, and those relationships can go a long way toward making you comfortable with the mortgage process.

However, while simply going to your personal bank for a mortgage loan may seem like the default option, that doesn’t mean that it is always the best option. On the contrary, if you simply go with the first mortgage program you see – which often comes from the bank you know – then you will have no point of reference to know whether or not the mortgage plan they are offering you is good or bad. You won’t know if you are signing your house away on a loan that you will never be able to pay off, and you won’t know if you could get a better deal somewhere else.

The Luxury of Choice

When you work with an independent mortgage broker, you give yourself the luxury of options. Since an independent mortgage broker operates completely separate from any bank, he or she does not have allegiance to one particular lending institution. Instead, such mortgage brokers are motivated to find you the best plan you can get, regardless of which bank it comes from.

This lack of hidden motives or allegiances is the most important thing about any independent mortgage broker. When you work with your personal bank, you might be doing so because you have a relationship with someone who works there and therefore feel more comfortable about what is, by definition, an uncomfortable and uneasy transaction. When you are putting up your home as security for a loan, or getting a massive payout from the bank to afford a new home, you are placing yourself in a situation that could easily turn into financial peril if you suddenly find yourself unable to make payments. With so much at stake, working with someone who can make you feel comfortable and set your mind at ease is important.

At the end of the day, though, your friend in the bank is still only going to be able to give you one mortgage plan (or at most, a limited range of options). He will also be motivated to get you to sign with his bank, so while you feel like he has your best interests at heart, that might not necessarily be true. When you hire an independent mortgage broker, your best interests take on a front seat priority, so even if you are working with someone you don’t know, you might still be able to trust them more than you can trust your friend or acquaintance at the bank.

How to Find a Reputable Independent Mortgage Broker 

If you decide to work with an independent mortgage broker so that you can shop around with different lending institutions, then you have already made a big step toward securing a loan that suits you. However, there is a lot more work to do. Make no mistake, if you want to give yourself the “luxury of choice” discussed above, you are also going to be adding a few steps to the mortgage process. When you work with someone at an established bank, you can at least usually rest assured knowing that they are a fully trained, licensed, and reputable mortgage expert. All of those adjectives can also be applied to a good independent broker, but it might take you a little time to find one.

As you would do with any independent worker, be it a nanny to a personal accountant, you should interview your mortgage broker thoroughly before deciding whether or not to work with them. Ask about your broker’s education. There is no standard degree that is “required” to become a mortgage broker, but someone who has taken to learn extensively about banking or business, as well as about mortgage laws, terms, and loan processes, is someone worthy of your consideration.

In addition, you need to make sure that your independent broker has the necessary licenses to perform the task you require in a legal fashion. All states require brokers to take individual licensing exams, though other licensing requirements might differ depending on your state or region. Look around online and educate yourself about how licensing works in your area, then ask your prospective broker for proof of license. Since license examinations test a broker’s knowledge of mortgage laws and the banking industry as a whole, a broker who has successfully attained a genuine license is usually perfectly qualified to help you find a desirable mortgage plan.

Finally, do your homework to make sure that your prospective broker is respected in his or her field. Look for reviews of the independent brokerage business in question online and see what other homeowners have to say about this person. In addition, run a background check to make sure your broker hasn’t been convicted with fraud, embezzlement, or other crimes that might mark someone who is looking to cheat you. Unfortunately, independent mortgage brokering is a field that can often attract crooked individuals, so learning how to tell the trustworthy brokers apart from the not-so-trustworthy brokers is important. Udemy offers a class on mortgage fraud detection and prevention that can help you with this part of the broker selection process.

Conclusion 

As you can see, working with an independent mortgage broker has a range of big benefits, but it also puts a fairly hefty load of responsibility on your shoulders. The most difficult part of the process is undoubtedly finding someone who you can trust to get you the best mortgage deal out there. If you can accomplish that, you will be rewarded with an affordable and fair mortgage that (hopefully) won’t take you decades to pay off!

Who knows, you may even learn so much from the process that you can shop around different mortgage rates on your own next time and render the whole process a completely independent one. Before you do that, though, you will probably want to go through the process of working with an independent broker (and learning a bit more about banking and loans in general, perhaps from this Udemy course). There’s a lot to be learned in the process of finding a good residential mortgage, but if you can find a skilled independent broker or learn the ropes on your own, you will be thrilled with the results.