3 Things You Should Know Before Working with Mortgage Broker

You’ve narrowed down the hunt to find your dream house, and now you’re on the research for the best mortgage to put those keys in your hand. One way to do it: Work with a mortgage broker who can shepherd you through the complicated lending procedure from start to end.  

You’ve probably heard the term “mortgage broker” from your real estate agent or friends who’ve bought a house. But what precisely is a mortgage broker and what does one do that’s dissimilar from, say, a loan officer at a bank? 

  

1) What Is A Mortgage Broker?

A mortgage broker acts as a mediator between you and potential lenders. The broker’s job is to work on your behalf with numerous banks to search the best mortgage lenders who best fit your requirements with the lowest rates. Mortgage brokers have a well-developed steady of lenders they work with, making your life easier.   

New mortgage brokers are licensed and regulated financial experts. They do all the legwork — from gathering documents from you to pulling your credit history and verifying your income and employment — and use the data to apply for loans on your behalf with different lenders in a short time frame.  

Mortgage brokers are licensed, financial experts. They collect papers, pull your credit history, verify earnings and apply for loans on your behalf. 

   

Once you resolve on a loan and a lender that works best for you, your mortgage broker will work together with the bank’s underwriting department, the closing agent (usually the title company), and your real estate broker to keep the transaction running smoothly through closing day.    

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2) How Does a Mortgage Broker Get Paid

Like almost all the sales professionals, mortgage brokers charge a commission for their services. They typically charge a “loan origination fee,” which can be about 1% of the loan amount and is paid by the borrower at closing. 

Sometimes, though, mortgage brokers confer no-cost loans so you don’t have to shell out extra money up front; the broker will instead be paid by the lender after the loan closes. However, choosing a no-cost loan to decrease your out-of-pocket expenditures means you’ll pay a higher interest rate, which costs more over time.   

3) Advantages of Using A Mortgage Broker

For beginners, a mortgage broker acts as your personal loan concierge and does all the work for you. The broker applies for loans with dissimilar lenders on behalf of you, finds the lowest mortgage rates, negotiates terms and makes the approval magic happen.  

Most mortgage brokers have relationships with several local, regional and even national lenders, and they can tap those links to get some loan fees waived for you. Our Australian Mortgage Brokers will give you ease of access and one-on-one consideration you likely won’t find when working directly with a loan officer at a large bank.

Another perk: Some banks and lenders work completely with brokers, and that, positions you to get qualified for positive loan products if your mortgage broker has a good relationship with those lenders.

You’ll also save time by using a mortgage broker; it can take hours to apply for loans, and then there are the hassles of communication involved in underwriting the loan and ensuring the operation stays on track. A mortgage broker can save you from managing all those discouraging details.  

To choose the correct mortgage broker, it’s wise to interview few people to find out what services they offer, how much experience they have, how much professionalism they carry and how they can make things easier. Don’t forget to check your state’s professional licensing authority to ensure they have current Joint Mortgage Broker License in good standing.