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What Does a Mortgage Loan Broker Do?

Mortgage loan brokers, also referred to as mortgage agents, are licensed financial service providers that collaborate with multiple lenders in order to find you the most advantageous mortgage terms. They’re an excellent solution for borrowers who have difficulty qualifying for loans or want to save time and money by getting a better rate.

Brokers are compensated by commission, which may differ from office to office. Typically, brokers receive 1% of the total loan amount they originate.

Mortgage loan origination is typically the first step in home-buying for most consumers. They usually begin by visiting their local bank or credit union to speak with a loan officer and apply for a mortgage. After receiving approval from several different lenders, the mortgage officer will send the application on to be processed.

Once a loan is approved, the lender pays a fee to the mortgage broker for their services in originating it; these costs are then passed along to the borrower. Fees include application and underwriting fees, appraisal/credit check fees, loan processing and closing costs as well.

According to the mortgage lender, mortgage brokers may need to pay an origination fee for submitting the loan application. This fee is often in addition to the interest rate on the mortgage.

Brokers sometimes have access to loans from private lending companies that do not directly offer them to the public. These lenders can be an excellent source of lower rates or special loan programs for clients with specific credit or income challenges.

Mortgage brokers possess an intimate knowledge of lenders’ fees, and may be able to request that some be waived. This can be especially advantageous if the broker has a good working relationship with the lender and is familiar with its charges.

They can assist you in finding the loan product that best meets your needs and budget, as well as keeping track of deadlines to ensure timely closing and avoid expensive extension or relock fees. They even coordinate communications between lenders, real estate agents, and other parties involved in your mortgage transaction.

Before selecting a broker, it is wise to interview at least two. This will give you insight into their personality, professionalism and responsive communication style. Furthermore, an interview can tell you if the broker has an impressive track record and follows through on all promises made.

Finding a mortgage broker requires some research, so ask friends, family and your real estate agent for referrals. It may also be beneficial to read online reviews from other mortgage brokers in order to make an informed decision.

The mortgage loan process can be dauntingly complex, making it difficult for those without professional guidance to navigate it successfully. A mortgage broker can be invaluable in this regard and may also have knowledge of special non-qualified loan programs that allow borrowers with unusual credit histories or debt-to-income ratios to qualify for mortgages.

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