Should You Use A California Mortgage Broker?

Buying a house is classed as one of the top five most stressful things you can do during your life so it helps to get the process finished as soon as possible. California mortgage brokers can help to speed things along with regards to finding the right mortgage for you but they do have a few drawbacks as well. So, do you use their services of don't you? Read on for more information...

What does a Mortgage Broker in California actually do?

Independent mortgage brokers quickly and methodically research the mortgage market so they can find the perfect deal for your particular circumstances. Being 'independent', they aren't attached to a specific financial institution and so the advice they give is totally unbiased i.e. they don't advocate the financial products of a particular bank or building society over all other possibilities. Asking an independent mortgage broker for advice is especially beneficial to first time buyers who aren't familiar with the way the mortgage market works or where to find low cost deals.

What are the drawbacks of using an independent mortgage broker?

The main drawback of independent mortgage brokers is that they charge for their services. You may qualify for a free consultation to begin with however you will end up paying them firstly to research the mortgage market and secondly to do all the paperwork and put your mortgage in place. Saying this, they do take the pressure of you by doing all of the hard work for you - all you have to do is sign on the dotted line.

The fees charged by some independent mortgage brokers in California can be quite high but as a rule, their fees are added to the amount you borrow on your mortgage and are taken from the money before it is passed to the house seller. This means that although you pay for their services, you don't have to have the money for their fees free at the time. You simply add the fee amount to the mortgage amount you ask to borrow.

What are the alternatives?

There are a few alternatives to using the services of an independent mortgage broker, including the following:

- An 'employed' mortgage broker. These individuals only recommend the financial products of the institute e.g. bank or building society, that they are employed by. This limits their advice quite dramatically, and the number of mortgage options you're offered. They are usually cheaper than their independent counterparts though because they don't need to spend time checking for a mortgage to suit your circumstances.

- Your own bank or building society. If you want to play the loyalty game then your own bank or building society is the place to try for a mortgage. You probably won't get the best deal available on the market but your bank might approve you where others won't i.e. because they know the ins and outs of your finances and can make a decision based on this rather than your long term credit history.

- The internet. The internet is the biggest marketplace in the world and the advent of price comparison sites means that you can search for mortgages without the help of a broker. Although you save the cost of the mortgage broker's fees by doing it yourself, you do have to search thoroughly as there are literally thousands of deals and options available from different institutions. This can take hours and a lot of searching as not every bank or building society puts their details on price comparison sites. Independent mortgage brokers on the other hand have specialised software that updates automatically when new mortgage products become available and so they can search a lot quicker and a lot more thoroughly than you can.

Which Independent Mortgage Brokers in California Should you Use?

There are thousands of mortgage brokers to choose from and the best way to find one is by word of mouth. Ask friends and family if they have had any good experiences with a specific broker and if so then make an initial appointment. If not, then make sure the one you pick is, as a bare minimum, a member of the FSA and if possible choose one that has higher qualifications in the mortgage industry.

So do you use an California Mortgage Loan Broker or not?

At the end of the day the decision is totally up to you. If you have the time to research the mortgage market thoroughly and deal with your mortgage company personally then you can probably get away without using their services. If you'd prefer someone in the know to do all the work for you though then an independent mortgage broker is the way to go. You'll have to pay for the privilege but when the fees are lumped in with your mortgage you'll hardly notice the cost.