They may have access to better loan options and rates than you would find on your own. They may be able to recommend lenders based on your specific needs (for example, if you're self-employed and need a lender willing to work with self-employed borrowers). They can save you time on mortgage research. Brokers have good working relationships with their lenders.
They often have a rough idea of the rates offered by a lender on any given day. Brokers often know what closing costs they can expect and what requirements each lender they work with has. Knowing this information in advance and allowing your broker to buy for you can save you a lot of time and hassle. Mortgage brokers don't actually give out home loans.
Instead, they research different mortgage options to help you find the one that best fits your needs and budget. Mortgage brokers have regular contact with a wide variety of lenders, some of whom you may not even know. For this reason, it may still make sense to make some rate purchases on your own, in addition to the offers sent to you by the mortgage broker. The mortgage broker gathers all documentation and ensures that the mortgage loan process proceeds to closing.
A mortgage broker aims to complete real estate transactions as an external intermediary between a borrower and a lender. Costs vary widely, but a mortgage broker generally earns between 1% and 3% of the total loan amount. If you don't have incredible credit, if you have a unique debt situation, such as owning your own business, or if you simply don't see mortgages that work for you, then a broker could provide you with access to loans that benefit you. You should go to a mortgage broker if you want to find access to home loans that aren't easily advertised to you.
Tools like this allow you to easily compare rates and give you additional knowledge when evaluating a mortgage broker's credibility. As long as you understand how the broker is compensated and that compensation doesn't mean you get a worse mortgage, using a broker could save you a lot of time buying prices on your own. Typically, a mortgage broker works with many different lenders and can offer a variety of loan options to the borrower. Working with a mortgage broker is different from working directly with a loan officer at a financial institution.
Some lenders pay mortgage brokers according to their own accounting schedules, which can be up to 30 days after the loan closes. If you already have business with a bank or credit union, it might be worth considering applying for a mortgage directly from that institution instead of working with a broker. In some cases, mortgage brokers can get lenders to waive some or all of these fees, which can save you hundreds to thousands of dollars. A mortgage broker can receive compensation through a combination of fees paid by borrowers and fees paid by lending institutions that want them to originate loans.
