Buying a home and deciding on the right mortgage options are major financial decisions that should not be entered into lightly. Many people do not understand the mortgage loan process and what options are available to them. Obtaining independent mortgage advice can clarify any of the processes home buyers do not understand and help them make an informed decision. There are several options available for obtaining independent mortgage advice.
Using an independent financial advisor
The advantage of using the services of an independent financial advisor when seeking mortgage advice is that the advisor is not tied to any lender and can give the buyer an unbiased opinion of which mortgage options are in their best interest. Independent financial advisors offer financial advice to their clients for a range of services, including individual investment portfolio advice, insurance advice, pension planning, and advice on obtaining a mortgage for purchasing a home. The financial advisor will look at the purchaser’s unique financial situation and offer advice based upon the home buyer’s assets, income, credit history, and other financial factors that may impact the ability to pay back a mortgage loan. The financial advisor is working for the home buyer, not a brokerage firm or bank. His goal is to help the client maintain a balanced financial portfolio. Financial advisors normally work on a fee-basis and charge according to the services requested by the client.
Using a mortgage broker
An independent mortgage broker works as a consultant between the bank and the home buyer in real estate transactions. The broker’s goal is to get a loan as soon as possible, so he will work to clear up any problems with a mortgage application to help the process go more smoothly. The independent mortgage broker will pre-qualify the borrower based on certain financial criteria such as income, the value of the property, and credit worthiness. This lets him know in advance which banks or financial institutions to approach for a mortgage loan. Using the services of a mortgage broker can save the home buyer valuable time in finding a bank who is willing to loan them the money to purchase a home. Many brokers do not charge an additional fee to the borrower, as they are normally paid a commission by the chosen lender when the loan closes out of the loan proceeds.
Mortgage broker vs. bank loan officer
Why would a consumer want to use the services of a mortgage broker instead of going directly to the bank and talking to a bank loan officer? The answer is simple. The bank loan officer works for the bank and is looking to make money for the bank. A mortgage broker is working for the home buyer. There are many lenders on the market with multiple loan options available. The bank loan officer only sells one product, that of the bank; whereas, the mortgage broker considers different mortgage options and chooses the one that best suits his client’s needs.
Online independent mortgage advice services
There are some independent mortgage advice services available through the Internet. One such service is called Ismyloanfair.com. This service offers to review mortgage loans, for a fee, to see if the home buyer is being taken advantage of by the lender. The way this works is that the buyer sends in by fax or email, a copy of the mortgage loan documents; loan application, credit report, good faith estimate, and truth in lending statement. Depending on which services the home buyer requests, there are different package plans costing, $129, $249, and $349. The services offered include:
- Credit report review: A credit report review is conducted to determine if there is anything included keeping the consumer from qualifying for the best mortgage terms. Suggestions are included for credit repair, which may help the buyer qualify for a lower interest rate.
- Loan product analysis: Gives the customer a review of the features of loan product selected and whether there is another product available that might better suit the borrower’s needs.
- Pricing Analysis: This is a review of the good faith estimate provided by the lender that explains in detail how much is being paid for financing. Suggestions are given if it is determined there is a better way to pay the closing costs and ways that closing fees may be negotiated with the lender.
- Recommendation: After considering all the information provided, a recommendation is given based upon the borrower’s unique circumstances as to whether the mortgage lender is being fair in his proposal. Recommendations may be to stay with the current lender using strategies to negotiate a better deal, or a suggestion may be offered to find a more reputable lender.
Regardless of whether the home buyer seeks independent mortgage advice through an independent financial advisor, a mortgage broker, or an online independent mortgage advice service; he should make sure he is dealing with someone who is reputable and offers sound financial advice. The borrower should feel comfortable doing business with the advisor and know what services are being provided upfront, along with any fees associated for these services.
