If you are out there looking for the best mortgage brokers to help you with your property purchase, you should first understand what a mortgage broker is and how they work. Generally, mortgage brokers manage your mortgage process by filing in applications with different lenders for loans, negotiating loan terms, locating competitive interest rates, etc.
Mortgage brokers function as middlemen between borrowers and potential lenders. Their job is to act on your behalf and work with multiple banks. Generally, a mortgage broker has a solid lender stable to fall back on, making your life easier.
Best Mortgage brokers are regulated and licensed financial professionals who take care of almost all the legwork involved in procuring real estate finance. They gather your documents so that they could pull your credit history, verify your employment status and income, and use the collected information to file in loan applications with multiple lenders. They manage to do this within a short span of time.
Once a specific loan and lender has been settled upon, the mortgage broker would collaborate with the underwriting department of the bank, your property agent, and the closing agent to ensure the transaction runs smoothly.
Mortgage brokers are invariably paid by lenders, at times by borrowers. They never get paid by both parties at the same time. The home prices and competitiveness in the local market would dictate what brokers end up charging. Generally, brokers do not get paid more than three percent of the deal’s entire value.
Are Mortgage Brokers Loan Officers?
Loan officers are basically a lender’s employees who get paid a predetermined salary (and bonuses) for writing the lender’s loans. Mortgage brokers, on the other hand, work independently or for a mortgage brokerage company. They deal with multiple lenders and make most of their money from fees paid to them by lenders.
Is a Broker Right for You?
A mortgage broker would help you save considerable time and effort. Applying for different loans is no joke and entails serious work. And then you have the communication happening back-and-forth during the loan underwriting process so that the transaction doesn’t derail at any point. However, before applying for the loan, you would also have to go through the list of lenders, their interest rates, maturity periods, etc. This is another major leg of the process that could be hard to do if you don’t have quality spare time at your disposal.
Choosing a Mortgage Broker
The ideal way to choose the right mortgage broker is seeking referrals from friends and family. Once you have a list of lender names, learn everything you could about their services, level of knowledge, communication style, and general approach to things. Your property agent could refer you names too. After having shortlisted potential lenders, interview at least three before selecting one.