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A mortgage broker is essentially a go-between. They’re a middleman between consumers and lenders, and they help you compare mortgage loan options when buying or refinancing a house.
Mortgage brokers also help with the loan application process. They’ll work with you to complete your paperwork, pull your credit report, and gather up any required documentation. Finally, they’ll submit it all to the lender on your behalf.
To be clear: A mortgage broker isn’t the same as a mortgage loan officer or mortgage banker. Brokers are independent, and they aren’t employed by the lender, bank, or financial institution they connect you with. Loan officers and bankers, on the other hand, are, and they’ll only offer you their own employer’s loan products. For this reason, brokers can usually give you access to a much wider array of loan products and mortgage rate options.
You may want to use a mortgage broker if:
Many first-time homebuyers overestimate how much home they can really afford. They may overlook issues like taxes, early renovations, or maintenance costs.
A mortgage broker can act as a voice of reason for you. They can look over your financial information and give you an honest assessment of what you can realistically afford. They may even connect you with a real estate agent to help you find the right house.
There are many lenders out there offering a wide range of mortgages. A mortgage broker can use your information and eliminate the poor fit loans. Then, they can walk you through the remaining options and explain the pros and cons of each one.
Plus, you don’t fill out multiple applications when you work with a broker. You fill out one application with the broker. They submit the information to all of the lenders.
The best mortgage broker will know the banks involved with lending. They’ll also know the banks sticking points.
The reality is that most banks will negotiate some terms on their loans. Unfortunately, each bank can differ in what things they’ll budge on for mortgage.
The broker can typically negotiate better terms for any given loan than you can get on your own.
Buying a home takes time. Getting loan approval can take a couple of weeks. Under typical circumstances, a house stays in escrow for a month.
The broker can monitor this process and provide updates when things change. That leaves you free for things like your job and family.
Those with bad credit scores often assume a mortgage will stay out of reach for the indefinite future. While a bad score does make the process more challenging, a good broker can typically find you a workable mortgage.
The question of what is a mortgage broker mostly takes a backseat to a more important question. What does a mortgage broker do for me? On the list of mortgage broker benefits, the big one is that a broker simplifies your life.
The broker deals with some of the more tedious and time-intensive elements of getting a mortgage. While they do that work, you lead your life.
Questions about home mortgage? Use our Ask a Mortgage Expert form to submit any question you have about the mortgage process and get a real tailored answer from a professional!
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