Tally it all up, and there are likely hundreds, if not thousands, of mortgage lenders in the market, all competing to land a spot on a homeowner's radar. But does using a mortgage broker make sense for homebuyers or when refinancing a mortgage?
In the video below, Motley Fool analysts, Gaby Lapera and Nathan Hamilton, discuss more about mortgage brokers to help homeowners better understand the homebuying process.
Gaby Lapera: Would you advise using a mortgage broker to find the best mortgage for you?
Nathan Hamilton: It is helpful. Yes, a mortgage broker, there are going to be some costs associated ...
Lapera: What is a mortgage broker?
Hamilton: They're essentially going to work on your behalf to find a mortgage. They're going to shop across various lenders to get you a good deal.
Lapera: Do you have to pay them?
Hamilton: Yes, yes. There are definitely benefits to it. As you look at it, here's where there's a benefit. Here's where there's not. The benefit is you're going to a professional that knows the market. They know who to go to for lenders. You give them your information. They're going to cast a wide net, narrow down to the most relevant mortgages for you and essentially give you some custom mortgage gold, wrapped up perfectly, laid on your plate.
With the Internet, there's so much information available out there, that a home buyer can actually get a lot of that same information just by doing it themselves.
For example, on our web site, you can compare mortgage rates across a number of Internet lenders. You just have to plug in, I think, it's four or five details on our rate tables. From there, you'll get a rundown of every mortgage lender, with ratings. You'll get what their current APRs are. You'll get an estimated monthly payment. In those scenarios, you've pretty much done the job of what a mortgage broker would do, but you're doing it by yourself to do the initial research.
Lapera: Yeah, and you can find those at fool.com/mortgage.
Hamilton: Correct. Mortgages.
Lapera: Sorry, mortgages, plural.
Hamilton: Yes, plural, yes.
Lapera: You're comparing all the mortgages you could get. One of the things, I think, to keep in mind is that for some people it's totally worth it to them to pay someone. They just don't want to take the time to do it themselves. They want the assurance that they probably got the best deal. Is there anything that you should look for in a mortgage broker? If you are going to get one.
Hamilton: Yeah, once again on the Internet, you can find any information possible. Check out the reviews for the mortgage brokers. You'll find that information readily accessible.
Lapera: I wasn't sure if it was like financial planners where you want to look for a fee only one who is a fiduciary and all that.
Hamilton: I would keep it very general.