Mortgage brokers help clients who are buying or refinancing a home find the right loan for their needs. They are typically hired by borrowers, but some brokers work independently of financial institutions.
They can save you a lot of time and money by finding the best possible home loan for your unique situation. They also know the lenders who will consider lending to you and are familiar with their fees.
The broker may charge a fee for their services, but this should be disclosed upfront and it should not be a hidden charge that is not revealed until you have agreed on a loan deal.
Some brokers will charge you a percentage of the loan amount or a flat fee for their work, but be sure to check that these charges are transparent and do not exceed what you will be paying. They can be a good choice for borrowers who do not have time to research the mortgage market on their own, or for those who are looking for a loan with a lower interest rate.
Youre a nontraditional borrower who has been turned down by a traditional lender and need help securing a loan with a different type of product, such as a special non-qualified mortgage (non-QM) program. They can also help borrowers who need a faster loan closing than a bank can deliver, because they have access to many different lenders who can quickly approve loans.
If you are working with a broker, its best to interview several and choose the one that fits your personality, expertise and communication style. This will help you feel comfortable working with them and will help you get the best possible loan experience, especially if youre in a tight financial spot.
Your mortgage broker will need to send you documents, fill out forms and make phone calls to get the information needed to submit your mortgage application. They will also compile paperwork and prepare for the home appraisal, underwriting and closing.
They can help you find the best deal on a home loan and may be able to get the lenders to reduce or waive some fees that you would not be able to request on your own. However, they are not required to do so, and its a good idea to ask for a free quote from a variety of lenders to ensure you get the best deal.
Some brokers can also help you shop around for other kinds of credit, such as lines of credit and personal loans. Some brokers may even be able to help you find a better rate for your existing debt.
Its not always worth using a mortgage broker, because they can miss out on some great borrowing opportunities that might otherwise be available to you. They can also be a burden for borrowers, since they have to pay a fee to their broker on top of the standard mortgage expenses.
A mortgage broker is paid a commission by the lenders they refer you to, which can create a conflict of interest. Its important to ask a broker whether they earn a commission from each lender they refer you to.