Getting a loan for your new home can be quite a pain, especially if you opt to get one from a bank. Most of the banks are quite useless and getting a loan from them is time consuming and a lot of effort. You need to fill out a lot of paperwork first, and you need a lot of documents to submit your application. That is why you should never approach a bank to obtain a loan, since you will only be wasting your valuable time. The other alternative is to approach a lender or mortgage broker to get you a mortgage loan.
Banks require time, money and a good credit score. Not all people have that. Another horrible experience I’ve had with banks is confronting people at counters. The people at the desks aren’t very interested in helping you and often move you from one place to another, making a job that can be done in a matter of seconds take hours to complete. That is why it is better to avoid going to banks and instead approach a lender. A commercial mortgage lender can obtain a loan at a better interest rate than what banks offer.
But lenders are also deceitful people, some try to get the most money out of you after noticing your desperation. That’s why you need to be very careful when choosing a mortgage lender. If you have friends in the real estate business, try to get a recommendation from them. They are the people who usually work with lenders and brokers and will help you find a good lender. Otherwise, you must hire the services of a broker. This may cost you initially, but it will definitely help you save money in the long run, that is if you find an honest one.
Brokers are the intermediaries between lenders and borrowers. They are agents who help potential borrowers find lenders. Brokers charge fees for their services, and these fees can add up to quite a bit. That’s why you want to make sure the broker does all the work and doesn’t force you to run. Hiring a broker will save you a lot of effort and finding an honest one will help you get the best deal. There are many ways lenders and brokers can scam you, and you won’t even know if you’re not careful.
Brokers take a certain percentage of the loan from the lender and the commission goes up if the broker is able to raise the interest rate on home loans. Another thing lenders do is quote a low interest rate for the initial term of the loan. This may sound incredibly attractive, but it’s actually quite misleading. You will only pay the low interest rate for the first year of the term, and then the interest rate will be increased.
Therefore, be careful when choosing a broker and never look for claim fees, as you will only have to pay more. It takes a bit of research to find a reliable broker who will give you good advice and find you a good deal on your home loan.
