Brokering A Deal On Your Mortgage? Why, Yes, You Can!
Brokerage firms are typically thought of as places where you broker financial deals for investments, not where you find the best deal on a mortgage. However, mortgage brokers do just that. They broker a deal between you and an investor who wants to back mortgage loans for non-traditional purposes. When you cannot get a mortgage in the usual fashion, you can go through a mortgage broker. Here is more about how that works, and where you can find a mortgage broker.
Investors and Companies That Back Non-Traditional Mortgages
It is a fact that there are investors out there that own companies and choose to back potentially and financially risky mortgages to give people a piece of the American dream- a home. Their companies have extra money to do this, and they are investing it through a mortgage broker with the hopes of gaining a sizable return over the years of the mortgage loans. For example, if you get a mortgage loan through a broker from one of these investors/companies, your interest rate is undoubtedly going to be a little bit higher than most, or you will have to pay PMI points. Most people opt for the higher interest rate to avoid paying for PMI, which means that all of that extra interest is money in the investors' pockets. Borrowers can refinance the mortgages with other lenders when their credit history improves.
The Broker's Role
The broker finds investors and companies willing to give you a loan. The terms for each investor are laid on the table so that you can pick which one you want. Then the broker begins brokering the best deal for both you and the investor. When you both agree to a set of terms, the broker draws up the lending paperwork, and a check is sent to the broker's office for you to give to the real estate agency or realtor to purchase the home. Sometimes you can even have the investor send the check directly to the agent who is handling the sale of the home. The broker files away the paperwork, while giving you copies for your own records.
Where to Find a Broker
Most mortgage brokers advertise heavily. You may have received tons of flyers in the mail from various brokers in the past. All of them promise "no money down, bad credit history-no problem!" sorts of messages before listing opportunities for a mortgage. Follow these ads to a broker's office to get started.
Contact a lender, like Cornerstone Residential Mortgage, for more help.