Mortgage Brokers serve as third parties that connect borrowers with lenders who fund mortgage loans and help facilitate the loan closing process.
Experienced mortgage consultants can assist in your search for a more beneficial home loan, saving both time and money by applying on your behalf for it with various lenders. Plus, their industry knowledge makes them trusted by many lenders!
What is a Mortgage Broker?
If you have ever wondered: What is a Mortgage Broker? The answer follows.
Mortgage brokers are licensed professionals who connect you with multiple loan offers from different mortgage lenders in order to find the ideal loan product for your individual circumstances. While their expertise allows you to compare more loans than would otherwise be available on your own, they don't always guarantee you the most advantageous terms and rates.
Professional consultants can save time by helping to resolve complications and collect paperwork to pass along to lenders for processing and approval purposes. However, there may be conflicts of interest if they get paid by one.
Lenders are financial institutions that process applications for loans and approve approval before crediting funds into borrowers' accounts. Lenders include banks like Bank of America as well as online money lenders like MoneyGram.
Companies offering standard mortgage loans specialize in both approval and funding them, then servicing them by collecting monthly payments from borrowers, managing escrow accounts, providing payoff letters when loan repayment becomes necessary, and selling loan servicing rights to generate capital.
They Help You Find the Right Loan
Mortgage brokers can save borrowers both time and effort when applying for a mortgage loan. Their knowledge of lenders and repayment terms will help avoid potential pitfalls such as onerous payment terms buried within mortgage contracts or hidden fees that increase loan costs.
Brokers also know which lenders offer loans that best suit individual borrower needs, which means they can recommend loans that would otherwise not be accessible.
Expert mortgage consultants can also help you locate the appropriate loan rate. Working with multiple lenders, they have access to an array of products - even loans from non-traditional sources like credit unions and non-banks - which they can source on your behalf.
Before selecting a mortgage broker, do your research thoroughly on their experience, track record and fees. If they cannot provide the service that meets your needs then look elsewhere for one.
They Save You Time
Mortgage brokers can save time by quickly searching multiple loan options at once and comparing rates, programs and other key information - this makes the process much more manageable for those without the time or expertise to research home loans on their own.
Mortgage brokers know their way around the lending scene and know which lenders will best meet your individual needs and goals. For example, if you're self-employed and looking for lenders with programs tailored specifically to self-employed borrowers, mortgage brokers are invaluable resources.
They can also help you avoid some of the more frequently charged mortgage fees, like application and origination fees, by working with various lenders on your behalf to request they waive some or all of these fees - this can add up to significant savings!
They Can Help You Save Money
When borrowing money to purchase a home, it's essential that you shop around for the most favorable loan rate and terms. Otherwise, you could wind up paying much more in interest over the lifetime of your loan than necessary.
Mortgage brokers help borrowers save money by finding them lower interest rates and more advantageous loan terms than they could find themselves. Furthermore, brokers may even negotiate reduced application and appraisal fees from lenders.
Fees charged by brokers typically range from 1-2% of your loan's total loan amount and should be paid either upfront or upon closing of your loan. If cost concerns arise, inquire as to whether your broker works on commission.
Brokers can assist borrowers in avoiding fees by showing them how to purchase points upfront - which will reduce your interest rate and save you money over time. Purchasing points early could prove especially useful if you plan to remain in your home for some time. In addition, brokers can provide pre-approval for your mortgage, allowing you to make more competitive offers on the property you're looking to purchase.
