Whether you’re purchasing a new home or refinancing a current loan, you can always use the help of a mortgage broker. A mortgage broker is the one who acts as a middleman between you and lenders. They’re the person who does the leg work of exploring all loan options to help you find the one that fits your needs and score the best deal. They already have a network of lenders they work with, thus making your life easier. Because home-buying isn’t the simplest and easiest financial decision people deal with, the expertise of a broker comes in handy.

Already decided to work with a mortgage broker? Here are 6 facts you need to know.

How do mortgage brokers work?

The job of a mortgage broker is to work on your behalf in terms of finding lenders and banks that offer the most competitive loan terms and rates that fit your needs. Mortgage brokers are licensed professionals who make the entire process of gathering documents and obtaining a mortgage a lot more efficient for you. Because each and every mortgage is unique, the role of the mortgage broker is to help you understand all the options available to you. Once you make  the final decision, they will collaborate with the lenders and take care of the paperwork for you.

How do they get paid?

Mortgage brokers are either paid by the lenders or the borrowers but they never get compensation from both. Most of the time, they earn from their commission in a certain percentage from the lender. However, in this case, you might need to bear the burden of the elevated rates. Just take note that brokers should only be paid between 0.50% to 2.75% of the total loan amount. So, if they demand anything exceeding this range, you might need to find yourself another mortgage broker.

What is the difference between mortgage brokers and loan officers?

Unlike mortgage brokers, loan officers are employees of a lending company. They do not earn a commission-based income because they are paid a fixed salary. On the other hand, mortgage brokers who either work independently or within a mortgage brokerage firm earn mostly from fees paid by lenders.

What are the benefits of hiring a mortgage lender?

A mortgage broker makes the home-buying process easier for borrowers and reduces the stress it entails. Because they are the ones who tackle all the paperwork, they help save a tremendous amount of time and energy. They present an extensive range of lender options for you to choose from and provide you with the knowledge and guidance you need to make the best decision. 

How do you know if hiring a mortgage broker is right for you?

Mortgage brokers tackle all the leg work involved in the house-buying process on your behalf. Because they are the ones who shop for competitive loan rates and help negotiate the terms, you won’t have to spend hours going back and forth to take care of everything you need for your mortgage and make sure that everything’s on track. 

While working with a mortgage lender offers a number of benefits, be sure to pay close attention to lender fees. Do a head to head comparison to help you make the best choice considering that this is one of the biggest purchases you’ll make in your life.

How do you choose a mortgage broker?

When looking for a mortgage broker, one of the things you can do is to ask for a referral from friends and family. It’ll be a lot better if they’ve had an experience working with that broker instead of simply dropping names. Find out all the information you need about the broker, such as their approach to clients, level of experience and quality of services they deliver.

Mortgage brokers help simplify the entire process of buying a home and help you make the best decision. If you’re considering working with a mortgage broker in your future home purchase, this article can serve as a helpful guide.

Ready to apply for a mortgage loan and make your dream home come to life? Please feel free to reach out to Calcite Credit Union for more information.