A mortgage broker is someone who acts as a middleman between lenders and borrowers. A skilled broker can look at a variety of different loans to find one which suits the needs of the borrower. Once they have found a mortgage that meets the needs of their clients, they are then paid a fee (commission) which is a percentage of the money loaned.
What Does a Mortgage Broker Do?
A broker can assist you in finding the best mortgage for your personal situation. Looking for a good mortgage requires you to contact a variety of different lenders and compare the interest rates on different loans. You will also need to know about the different fees and closing costs that will be included with the mortgage. This can be tedious and time-consuming!
A broker has access to loan programs that you are probably not even aware of. The broker can assess which program will best serve you in this situation. Your broker will also guide you through the application process, create a list of what you need to have on hand to file for a mortgage, and help set up necessary appraisals, etc. until the mortgage is closed.
Poor Credit? A Broker May Help!
If you have a less than perfect credit history, you may have trouble locating a mortgage at competitive interest rates. Using a broker may allow you to find better deals than you would find on your own. Many banks are not flexible with down payments, and a mortgage broker can find companies and negotiate a down payment that is much lower than you would find at many banks.
How does a Mortgage Broker Get Paid?
A broker typically receives a fee that is a small percentage of the loan amount. That fee is normally paid by the lender and is typically built into the cost of the loan.