Top Five FAQ's Brokers Get Asked
In many business situations, “cutting out the middleman” makes things more efficient. In real estate, however, mortgage brokers are extremely effective in their position as intermediaries between borrowers and lenders. Often unfairly stereotyped as pushy sellers who tack on hidden fees, brokers can help their clients find the best loan terms and rates; the following are five of the most frequently asked questions brokers are asked.
How are you paid?One of the most common concerns buyers have when working with a mortgage broker is how the broker will be paid. Mortgage brokers are typically paid when the transaction is closed; the broker fee is often embedded in the lender loan origination fee. For most brokers, this fee is 2-3% of the total loan.
What are your hours?Unlike traditional lenders, most mortgage brokers operate outside of typical banker’s hours. This added flexibility allows brokers to help their clients move through each step of the mortgage process quickly and with minimal delays. Likewise, most brokers are readily available by phone, email, or even text any time of day.
What type of loan is best for me?This is a personal question and varies wildly from borrower to borrower. A good broker will ask questions about income, down payment, future financial plans, and more before making recommendations on loan options. Potential buyers should consider a variety of loan options: fixed versus variable interest rates, 15- versus 30-year mortgages, FHA or VA loans, and more.
How much can I afford?Brokers can help their clients determine how much house they can afford, the best down payment amount, and what loan terms will best suit their needs. Likewise, a good broker can provide buyers with a breakdown of different interest rates and fees based off of different down payment amounts.
Why should I work with a broker instead of a bank?Mortgage brokers act as personal shoppers; with access to a wide variety of lenders, they can help their clients find the best terms on a loan. Because brokers work for their clients instead of a single financial institution, they are able to compare loans from different lenders – including Fannie Mae and Freddie Mac. Brokers can also give their clients rates at wholesale costs.
by Author, Dec. 21, 2020