When looking to finance a new home, a consumer’s initial step is usually to go to a bank and ask for a mortgage loan. However, more often than not a bank’s goals are not in line with the reality homebuyers face today. Moreover, consumers are not always aware of the different financial opportunities available to them. For these reasons, going to an independent mortgage broker can help you find a better deal.

Knowledge and Expertise

One of the biggest setbacks homebuyers face is a lack of knowledge of the financial industry and mortgage market as a whole. There are various different mortgage products available to homebuyers, and there is a lot of competition for your loan. Mortgage brokers are aware of this. By analyzing your personal situation a mortgage broker can leverage your financial position to match your needs. This, grouped with access to the large network of lenders brokers usually have, provides a great opportunity to save you money.

Mortgage brokers can also use their expertise to help guide you with your financial planning. They can help prepare you for future mortgage refinances or renewals and can advise you if you ever get into financial trouble. Their knowledge can go a long way.

Access to a variety of lenders

Mortgage brokers do business with dozens of lenders. They work with national and private banks, lenders and other financial institutions. It is a hard and time-consuming process for homebuyers to test their chances with a variety of different banks. On the other hand, mortgage brokers have pre- established contacts with many financial institutions. They can match your financial standing with the right lender based on their own pre-existing relationships. This can both facilitate and speed-up the process for you.

Volume Discounts

A benefit of using a mortgage broker lies with the fact that they deal with mortgage applications in bulk. They bring a lot of business to lenders, and so they find themselves in persuasive and influential positions. They pull this influx of business in your favour because it allows them to leverage volume discounts into their negotiations. When lenders see a large amount of business brought in by a broker, they are more likely to hand out better deals. This translates to lower mortgage rates and lower monthly mortgage payments for the homebuyer.

No Service Costs

Mortgage brokers don’t charge consumers for their services. Instead they charge lenders a fee for their work. This fee is determined by the size of the mortgage loan provided to the consumer. The reason banks are willing to offer loans through mortgage brokers is because they save on their own operation costs. It is cheaper for a financial institution to pay a mortgage broker than it is to process a mortgage application through their own sales representatives. Lenders save on overhead costs, mortgage brokers are paid by the lender, and you, the consumer, get a better deal!

Your Credit Score

If you were to go to various different banks to try to find the best deal for your mortgage, each institution would individually pull your credit score. The downside to this is that every time your credit is pulled, you are shaving points off your credit rating. Despite your good notion of shopping around to try to find the most competitive mortgage loan, you can actually damage your chances for qualification by having your credit score pulled too many times. Instead, if you use a mortgage broker, your credit score only gets pulled once. The mortgage broker would then approach each lender individually, without you having to worry about a thing.

Author bio: Cristobal Ravazzano is a writer, web developer and customer service agent for Mortgages Canada – a leading mortgage brokerage firm. He is also a student at Concordia University in Montreal.