Mortgage Broker Oklahoma
If you’re in the market for a new home, you may be considering looking for a mortgage broker in Oklahoma. Mortgage brokers can be a great resource when buying a home, and they offer many benefits that large banks do not. In this blog post, we will answer some of the most common questions people have about mortgage brokers. We’ll discuss whether or not they provide loan estimates, how their fees are tax deductible, how they get paid, and why you should use one instead of a bank.
Can Mortgage Brokers Provide Loan Estimates?
The short answer to this question is yes, mortgage brokers can provide Loan Estimates (LEs)—but they typically will not provide one unless a prospective homebuyer submits an application. This is because the LE is a legally binding commitment which can end up costing them money if not handled properly.
What Is a Loan Estimate?
Once you have submitted an application for a LE, you will receive a three-page form that contains all the important details about the loan you are hoping to procure. This document must be provided to the applicant within three business days of submitting their appropriate paperwork. The aim of a loan estimate is to describe the terms of the loan in clear terms so that you can better understand the mortgage you’ve applied for, often procured as a means of comparing mortgage loans. This allows homeowners to assess which type of loan is best for their unique circumstances.
Are Mortgage Broker Fees Tax Deductible?
Unfortunately, no, if a fee is considered a mortgage broker fee, it is probably not tax deductible. This is because the IRS does not define the fees for your mortgage broker as prepaid interest, which means it is ineligible for deduction.
How Do Mortgage Brokers Make Money?
As you may have guessed, mortgage brokers make their income from the fees they charge as a result of their services—typically between 1-2% of the value of the loan. Mortgage brokers may work collaboratively within a brokerage or work independently—but the bottom line is, the larger the size of the loan you take out to finance your house, the more money your mortgage broker will make from working with you.
For example, if a mortgage broker working at a rate of 2% of the value of the loan closes a deal with a client purchasing a $300,000 house, they will make $6,000 in profit. The percentage that a mortgage broker will be able to charge their client varies greatly depending on their experience level and knowledge of the industry.
Which Mortgage Broker Is Best?
While it is obviously fair that a mortgage broker should earn an income based on working for you, it may be advisable to seek out multiple quotes from different brokers before settling on the right one for your situation. While some might argue that a more “seasoned” broker with more years of industry experience will provide them with better lender opportunities, others might argue that you’re better off looking for an eager rookie who’s willing to work hard for you to make a name for themselves for a lower rate. If you have any questions about what your lender opportunities are, contact Gain Mortgage Group today!
Will Mortgage Brokers Become Extinct?
This question often comes up in the same breath as “will real estate agents go extinct,” as with the development of the internet and other modern conveniences, it’s increasingly easy to both sell and purchase a home without the use of a “middle man” like a real estate agent or a broker. However, as long as there is a real estate market, it is likely that there will be both real estate agents and mortgage brokers working within that market. The reason for this is that brokers and real estate agents know the market intimately and must stay abreast of any changes in the market or legislature that may affect their trade. Mortgage brokers will also have connections within the industry that may make buying a house faster, easier, and simpler than trying to understand the complexities of the lending business on your own.
Why Use a Mortgage Broker Over a Bank?
The primary role of a mortgage broker is to connect prospective homeowners with lenders that can accommodate their financial circumstances and wishes. Because they understand the industry so well, they make great facilitators, especially for first-time homebuyers. There are also several other benefits to using a mortgage broker, including:
- A broker will likely save you time and effort: To say the least, the housing industry is complex, nuanced, sensitive, and ever-changing. If you’re not already taking keen notes on changes and updates to legislation on lenders and constantly comparing rates, you’re likely not to have the knowledge necessary to accurately assess the best lender for your needs. Why go through the hassle of trying to understand the industry when you can let a professional handle all the legwork for you?
- Brokers might be able to save you money on fees: Buying a house is an expensive ordeal, rife with many opportunities for fees tacked upon fees. Examples of this include application fees, appraisal fees, origination fees, and more. In some cases, a broker may be able to swing it so that your fees are waved, which could save you hundreds—even thousands—of dollars.
- Brokers have industry connections: If your broker knows who plays nicely with new homeowners and who to avoid, that information can become priceless to their clients in both the short and the long term. Brokers may also be able to get discounted rates by working with close partners, allowing prospective homebuyers an advantage over the competition.
Gain Mortgage Group: Oklahoma Mortgage Brokers
While it can be tempting to skip the process of working with a broker and heading straight to the bank for your mortgage financing needs, it might be wise to at least consult with a mortgage broker—or two, or three—before you land on a lender for your home. Mortgages are a colossal commitment, but they don’t have to be overwhelming and scary. In fact, working with a mortgage broker will likely save you time, give you an edge on other applicants, and maybe even save you money as well.
Are you looking for a mortgage broker to walk you through your options? Contact Gain Mortgage Group today!