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How to work with your Mortgage Broker

How to work with your Mortgage Broker

A mortgage broker can be your best friend during the lending process. These real estate professionals are familiar with a variety of lenders, speak the “legalese” that helps make understanding contracts and paperwork easier, and want to help their clients get to closing with minimal stress and frustration. The following guide can help potential buyers as they make the decision to work with a mortgage broker.

What is a mortgage broker?

A broker is a certified financial and real estate professional who works as an intermediary between buyers and lenders. While individual buyers are only able to access loans directly from credit unions, banks, and other lenders, brokers are able to help their clients apply for wholesale loans.

One of the primary jobs of the broker is to do the mortgage shopping for their clients. During this process the broker will collect financial information including credit reports, employment history, and debts and assets from their clients; they use this information to help them find a lender with the most favorable terms and conditions. Doing this often saves buyers considerable time and money as they are not filling out applications with multiple lenders.

How are mortgage brokers paid?

Mortgage brokers work independently from financial institutions and are not paid by a specific bank or credit union. Most mortgage brokers charge origination or brokers fees that are paid when buyers close on their home; these fees are rolled into the total loan and are not paid separately. Because brokers can help their clients save by accessing wholesale rates, in many cases using a broker still saves buyers money in the long run.

What are the advantages of working with a mortgage broker?

There are a number of advantages to working with a mortgage broker versus a lending officer at a single institution.

  • Brokers have knowledge of a variety of available loans, lenders, and options
  • Brokers comparison shop for their clients, saving them time
  • Brokers can access wholesale mortgage rates

Because mortgage brokers work with a variety of lending institutions, they are often able to help their clients find the best rates and terms for their new home. This is particularly true of buyers with low credit scores or other credit problems; mortgage brokers can direct their clients to lenders who are more likely to work with those with past credit problems.

How can I find a mortgage broker?

One of the best ways to find a mortgage broker is by asking a real estate agent. Like brokers, real estate agents work in the industry every day; they often have a wide network of brokers whom they have worked with in the past and trust. The following are a few examples of questions to ask before hiring a broker.

  • What experience do you have as a mortgage broker?
  • Can you provide references?
  • What is your process for working with clients?
  • How will you be paid?
  • Do you require payment upfront or take your fees at closing?

Working with a mortgage broker is an easy way to simplify the lending process while ensuring you are getting the best rates, terms, and conditions on your new mortgage.

by Author, May. 02, 2019

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