There are many factors to consider when you are looking to buy a home: size, price, neighborhood, and more. Choosing a mortgage to buy that home has its own challenges too. A mortgage broker can make selecting the loan that’s right for you easier.
What is the role of a mortgage broker?
A mortgage broker helps you find a lender that fits your needs. They gather mortgage rates and terms from their network of lenders and present that information to you. A mortgage broker does not lend you money. Instead, they help you understand your loan options. Mortgage brokers can help you gather documents you will need to complete your application and serve as a liaison between you and your lender during the underwriting and approval process.
What is a mortgage lender vs mortgage broker?
Mortgage lenders review and approve mortgage applications to help you buy and refinance houses. Mortgage brokers help you choose a lender and work with the lender on your behalf.
What is a mortgage broker fee?
Mortgage brokers typically make money by charging a commission on your mortgage, paid either by you or the lender. The fee sometimes ranges from 1% to 2% of the loan amount. If you are paying the broker fee, it can often be paid at closing or included in the total loan amount. If the lender pays for the broker, those costs are typically built into the cost of the mortgage you’re offered.
What is the difference between a mortgage broker and a loan officer?
A loan officer works for a single lender. A mortgage broker works with a variety of lenders on your behalf. Since a loan officer is employed by the lender, they do not charge broker fees.
What are the benefits of using a mortgage broker?
If you were comparing several lenders on your own, you would be responsible for communicating with all of them individually. You would have to provide several sets of financial documentation for the lender to generate an offer for you to compare against their competition. A mortgage broker can simplify this process so that you only complete it once.
Mortgage brokers often understand the advantages and disadvantages of different loans, and can help you choose the one that’s right for you. For example, you might have the option to choose between a conventional and an FHA loan when you buy a house. A broker can help you choose. Loan officers can also explain the advantages and disadvantages of different loans.
Depending on a mortgage broker’s connections, they may help you find a better rate or term with less effort. This can be especially helpful if you are worried about finding a lender that understands your unique financial situation or if you have a lower credit score. A mortgage broker can often make the underwriting process more efficient by responding to the lender and providing information in a timely manner.
Talk to us about your next mortgage
Freedom Mortgage works with mortgage brokers to help foster homeownership in the United States! We can also help you buy or refinance a home with conventional, VA, FHA, and USDA loans.
Last reviewed and updated July 2022 by Freedom Mortgage Corporation.