What Is a Mortgage Broker and What Services Do They Offer?
What Is a Mortgage Broker?
A mortgage broker is an individual who acts as an intermediary between borrowers and lenders, helping them secure mortgage loans. They typically partner with several different lenders, comparing loan options and providing insight into the local market. Furthermore, they collect financial documents like income, assets and employment documentation before submitting them to a lender for approval.
How Does a Mortgage Broker Get Paid?
Mortgage brokers earn an origination fee from lenders in exchange for their services. Usually, this fee ranges between 1%-2% of the loan amount; however, larger loans may have higher fees associated with them. All fees are typically disclosed upfront and included in the loan price, so borrowers never get shocked by hidden costs during application.
What Are the Advantages of Working with a Mortgage Broker?
1. Access more loan offers and mortgage products than you could find on your own – When speaking to a loan officer at your bank, they can only refer you to certain loans. A mortgage broker helps compare multiple loan offers from various lenders, giving you more choices in terms of rates and terms.
2. Cuts down on time and stress – Working with a mortgage broker can help you quickly locate the most competitive rates and terms for your home purchase or refinance, especially for first-time homeowners who may not be well informed about the mortgage process. This is especially advantageous to those seeking lower payments on their initial home purchase or refinance.
3. Helps you avoid hidden fees – A reliable mortgage broker will be familiar with the fees charged by lenders and can ask them to waive certain costs that you may not have considered on your own.
4. Mortgage brokers can save money – Through their connections with many lenders, mortgage brokers often have access to lower interest rates and fees than what one might expect. This could result in lower monthly payments on your home loan, especially if you opt for a fixed rate mortgage.
5. They can save you time – Through their connections with lenders, they often arrange appointments for you with the underwriting department and title company within hours. This is especially beneficial for first-time homebuyers or borrowers facing unusual or difficult circumstances who might otherwise need to wait weeks for an appointment.
6. Mortgage brokers can assist in finding the lender best suited for your individual needs and budget – A mortgage broker has access to various lenders, so you’re sure to find one offering a wide range of loan products.
7. Mortgage brokers provide valuable insights into the local housing and real estate markets – Mortgage brokers offer advice on buying a home, such as tips on making it more appealing to potential buyers. Furthermore, they have knowledge of the neighborhood where you plan to buy a property, including any restrictions on zoning or building permits that need to be adhered to.
