Find yourself wondering what a mortgage broker is? A mortgage broker acts as an intermediary between the borrower and the lender and controls transactions between the two. They take care of finding the best mortgages and interest rates by using their personal network of financial institutions and lenders. 


What A Mortgage Broker Does

Working with a mortgage broker is perfect for someone who does not want to deal with extra work and headache and is especially great for first time home buyers that need a bit more guidance and support. 


Why would you want to use a mortgage broker

If you are in the market for a new home and want to find home loans that aren’t readily advertised to you, then you should work with a mortgage broker. A mortgage broker can save you a lot of time getting preapproved for different loans, especially if you do not have amazing credit. They make the process stress free and manage it from start to finish and can have access to loans that could be beneficial to you. 


Make sure you do your do-diligence when looking for a broker and read through all of the information they give you. Ask your friends, family or even real estate agents if they have someone they would recommend.


A few quick facts to get you better acquainted with what a mortgage broker does and does not do:

  • Mortgage brokers do not work for mortgage lenders and work only for the borrower
  • Mortgage brokers are licensed and regulated financial professionals 
  • They will gather documents from you, pull your credit history and verify your income and employment
  • They will find a plethora of options for you and create a head-to-head comparison so you can see all of your options and decide what is best for you 
  • Brokers can get lenders to waive application, appraisal and other fees 


How much do you pay a mortgage broker?

According to Forbers Advisor, mortgage brokers can be paid multiple ways, depending on who is the one paying.

  • Borrower fees: These fees are paid by the borrower and typically range from 1% to 2% of the total loan amount. They can be paid as a lump sum at closing but are sometimes rolled into the total loan amount or otherwise incorporated into loan fees.
  • Lender commissions: Lender commissions may range from 0.50% to 2.75% of the total loan amount and are paid by the lender after closing. However, when lenders are paying commissions to brokers, they typically pass these costs on to borrowers by building them into the cost of the loan. This is why it’s important to discuss fee structure with a potential broker before applying for a loan. (Forbes Advisor)


I found a mortgage broker, now what?


Once you find a loan that works best for you, your mortgage broker continues to participate in the home buying process. They will work with the bank’s underwriters, the closing agent and your real estate agent to make sure everything goes as planned. 


With all that Covid-19 is doing to the housing market currently, it may be a better time than ever to work with a mortgage broker to get things done smoothly, quickly and right the first time. 


Questions to ask your mortgage broker:

  1. Which lenders do you work with?
  2. What type of clients do you typically take?
  3. How do you get paid? 
  4. How much money can I borrow and what is a good amount to put down right now?
  5. What types of interest rates are you seeing around the market currently? 
  6. How early can I lock in an interest rate
  7. What are estimated closing costs?
  8. Any hidden fees I should know about
  9. Any tips for first time or even repeat buyers in the current market?
  10. Do you have any references?

Whether you are a first time home buyer or purchasing a multi-million dollar home, you have found the right person. Ken Venick has over 30 years of experience in the mortgage loan business and can put you or your client in the right mortgage loan product for their unique needs. Contact us today!