Looking for your dream house is an exciting experience but the financial side of buying a home can turn into a nightmare for a newbie. Appropriate financing is the most complex, yet crucial steps in the home-buying process. For the majority of us, understanding concepts of principal, interest, taxes, insurance, prepayment penalties, and contingencies seem bewildering. For this reason, hiring an experienced mortgage broker is a wise decision to find the best deal without any hassle.

A competent and experienced mortgage broker not only finds the best mortgage deal for you but also performs all the legal formalities related to the lending process. However, before buying a home and hiring a professional, consider following points to understand what your mortgage broker wishes you knew before you got started with the mortgage process.


1.    Know the rules of down payments

It is important to educate yourself on down payment requirements, either by asking your broker or by doing your own research to ensure that your down payment funds follow financial regulations. Most of the new home buyers mistakenly believe that if they’re short of cash, they can take money from their friend for down payment and later pay it back to them. However, they must bear in mind that borrowing money for down payment is simply not allowed. Therefore, in any such case, your mortgage broker can help you figure out the best legal way to fund your down payment and ensures that it’s thoroughly documented.


2.    Mortgage brokers don’t have the supreme deciding authority

There’s no doubt that mortgage brokers do a lot when it comes to home financing, from educating borrowers, finding lower rates, to taking care of all the paperwork. Although it is important to remember that there are a few things they’re unable to do, such as approving the mortgage applications and decide how much money a potential home buyer can borrow. They merely work as middlemen between lenders and borrowers. It is the sole decision of lender to whether or not approve a loan and the amount along with the interest rate. So, remember a mortgage broker is not a guaranteed way to obtain a home loan because they do not have the authority to approve your application.


3.    Make sure to avoid big changes and purchases

Once your loan process is started, make sure not to quit your job or purchase any costly item, like a car. This is because making such changes without consulting your mortgage broker may result in declining your mortgage.

If you’re thinking about buying an expensive item, such fancy furniture for your new home or a new car wait until your loan is approved because these purchases can delay your closing or even result in a decline from the bank.

Similarly, a sudden job change could put your home loan at risk. This is because most of the time the lenders ask for recent pay receipts, usually from the past 30 days. So, if you switch to a new job during the mortgage process, your home-buying process may get pushed back the closing date.


With increasing competitiveness of the industry, more and more people are using mortgage broker for a home purchase, however, it is crucial to keep above-mentioned things in mind before reaching out to a professional. Hiring a reliable mortgage broker is preferred by most of the first-time home buyers because these professionals make the financial aspects of purchasing a home so much easy. They not only educate and help the borrower pick the best financing option, but also complete all the legal formalities of the mortgage approval process by working closely with loan officers, processors, underwriters and closing representatives.

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