Florida Mortgage Brokers Can Be Invaluable, But Understand Who’s Paying For What

We talked last month about the usefulness of a Florida mortgage broker in starting your home search. Although estimates vary, it’s generally thought that about half of all American homeowners get their loans through mortgage brokers. Still, many worry that using a broker does not represent as good a deal as going directly through their bank or credit union.

The long and short of it: A good mortgage broker has access to loans offered by a wide variety of lenders, and will do much of the shopping around for you. But in all likelihood, brokers charge for their services and you will be affected by this.

• If you’re unfamiliar with the various types of Florida home loans being offered, their services can be indispensable.
• It can, in many cases, be especially valuable if there’s something tricky about your home loan application, such as a glaring financial flaw or a bad credit history.

Watch out with many online services that don’t reveal much about fees until later. Talk to as many people as you need to, but get the details at the onset. Be sure to look for points paid at closing. Each point is an up-front fee equivalent to 1 percent of the Florida home loan amount.

The biggest hurdle to watch out for is payment. Many brokers will claim they are being paid by the lender. But the fee for the broker’s work comes from the borrower’s pocket one way or another — typically through closing costs or a slight increase in the interest rate of the loan.

Of course, if the broker gets a low wholesale rate from the lender, the final rate may still be attractive despite the broker’s markup. The key question is whether you end up paying the lowest mortgage rates available in the marketplace at the time.

Even if you want the hand-holding you can get from a broker, shop around. Check with several brokers as well as banks, savings and loans, and your credit union. Ask each mortgage broker you talk to which lenders it deals with.

Many companies advertise Florida mortgage rates in newspapers, and shopping without having to commit in order to compare them is easy with online services such as our site. For a free consultation, complete our secure form now!