Mortgage brokers are professionals who assist individuals and businesses in securing financing for homes or commercial real estate projects. To do this, they assess a company’s loan requirements and collect financial data such as income, assets, employment status and credit documentation. Afterwards they present options to potential lenders based on those needs, valuation and ability to repay the loan.
Mortgages are one of the biggest financial decisions a person will ever make, and they can be stressful. A mortgage broker can simplify the process and give you peace of mind during this monumental financial decision.
What is a Mortgage Broker and How Does it Work?
A mortgage broker finds loans from various lenders, such as big banks and smaller institutions. In addition, they may have access to nontraditional lenders who may provide lower rates or other advantages.
They assist you in searching for the most favorable terms and fees, as well as offer advice on how to pay off your mortgage faster. Furthermore, they protect you against costly fees and hidden charges that accumulate over the life of your loan.
Finding a mortgage broker is easy – ask around or search online. These professionals are state-licensed and often have an area focus, making them perfect for finding loans tailored to your area.
When selecting a mortgage broker, look for someone with extensive experience and an impressive track record. They should have no problem providing two or three references from past customers. You should also inquire about their level of service and how they handle your case.
Some mortgage brokers prioritize volume over quality, which may result in subpar customer service and hasty decisions. If you’re worried about these aspects, be sure to interview several mortgage brokers prior to making your choice.
Choosing Between a Mortgage Broker and Loan Officer
A mortgage broker can save you time and money, but they’re not suitable for everyone. They may not always provide the most advantageous options and there are often hidden fees that add up quickly. Additionally, mortgage brokers usually charge high commission rates that might make them unpopular with some consumers.
Furthermore, brokers rarely offer the most advantageous rates and terms on their own; so it is important to compare their offers with those from your bank in order to guarantee you’re getting the most advantageous deal.
The Dodd-Frank Act limits how high brokers can charge their fees. They’re only permitted to charge between 1% and 2% of a loan amount, depending on local market competition.
Mortgage brokers can save you a lot of time and hassle by helping you apply for loans with lenders who may not be accessible directly. Furthermore, they may negotiate on your behalf to receive waivers on application, appraisal and origination fees that have been approved by the lender.
However, broker fees can add up and they may push you into loan products that don’t fit your credit situation. To learn what others think of mortgage brokers, it’s wise to read reviews to learn what others have said about their services.
