Mortgage brokers are the individuals that serve as the middle men between a bank or other lending institution and the person taking out the loan. This is a very competitive market and an extremely popular profession. These are highly important people that are available to assist loan applicants with any possible question that may arise during the entire mortgage origination process. Most brokers have relationships with multiple lenders and banks, making them able to provide applicants with many options.
Some of the tasks that a mortgage broker might have to perform include the following:
'Attracting clients with marketing skills' Assessing the financial history and current situation of borrowers' Providing credit counseling on occasion for borrowers who need to correct credit issues' Assessing the current market to find mortgage products that will work for the needs of the client' Gaining pre-approval from lenders by applying for an agreement in principle' Gathering of all necessary documents for the loan application' Helping borrowers fill out the lender application form' Explaining of all legalities involved' Submitting the application and proper documentation to the lender
The mortgage financing industry has become highly competitive, with a mortgage broker having the upper hand in much of this industry. While brokers didn't have access to wholesale markets in the 1970s, that has all changed today. They are now able to tap into a majority of resources. It is easy for them to scour the market and find the best deals for borrowers. By having a lower overhead cost, a mortgage broker is able to instantly lower rates for clients, thus increasing the competitive edge.
While it is highly beneficial to use a mortgage broker, keep in mind that they work on commission. Sometimes the borrower pays the commission and other times it is the lender who pays it. Be aware of any fees that may accumulate from using a broker to secure a mortgage loan. There are a few questions to keep in mind when making a decision on which broker to choose. These important questions are listed below:
1. What is the best type of loan for me?
2. How much will the interest rate and APR be?
3. What are Discount Points?
4. How much will the origination fees be?
5. What is the total amount of all the costs?
6. Does the lender guarantee the Good Faith Estimate?
7. Do you offer rate locks on loans?
8. Is there a penalty for paying the loan off early?
9. Can you approve loans in-house?
10. How much time is needed to fund?
11. What is the amount of your commission?
Choosing a mortgage broker can take a bit of time, but finding people who have used certain ones might help. Getting references for various brokers will provide you with a list of reliable individuals. These references can be obtained from family members, co-workers, or friends.
There are also a variety of sites online that recommend specific brokers and are usually trustworthy sources. Be sure to double check on companies these brokers say they are with. Contacting the Better Business Bureau is one way to see if any complaints have been placed on any of the companies. Overall, mortgage brokers can be a huge asset in the mortgage application process. |
