What Is A Mortgage Broker & Do You Need One?

By: Kristina0 comments

There are several ways homeowners can acquire a mortgage loan. They can go to a credit union company, a bank, an online lender, a dedicated mortgage company, or simply get a mortgage broker to do it for them.

And what is a mortgage broker? Mortgage brokers are professionals who act as middlemen between borrowers and lenders. Their job is to gather the paperwork and documentation of consumers, and shop around for potential lenders – sometimes at a certain fee. 

Even though the significance of mortgage brokers has declined over the last 10 years or so, a good portion of homeowners is once again banking on this method because of the value that it brings. This includes the value for the self-employed, those who lack W-2 income, or if one has bad credit.

What Does A Mortgage Broker Do?

So what does a mortgage broker do? As we said earlier, a mortgage broker is a financial professional, who is regulated and licensed, and acts as a mediator between a borrower and a lender. They offer the most appropriate mortgage loan and help borrowers connect with a network of lenders that best satisfy their rate requirements and financial situation. 

Mortgage brokers do their research and are specially experienced to the point that they are aware of options that borrowers have no knowledge of. There are a variety of special mortgage loan programs that qualify homeowners, especially those offered by the Veterans Affairs Department, Federal Housing Administration, the Department of Housing and Urban Development, and the Department of Agriculture. 

Getting such details out from those programs could be quite strenuous for one homeowner. But many mortgage brokers will ask you questions right from the get-go to determine whether you are eligible for these programs are not. Another thing that highly experienced and seasoned mortgage brokers do is negotiate a better deal for you. Sometimes, they can get you a better interest rate, whereas other times, they can get a waiver on some mortgage fees and other types of costs. 

All in all, a mortgage broker hopes to bring a faster overall loan process than simply taking it up with a lender. 

Why Do You Need A Mortgage Broker?

Once you have secured a renowned, legitimate, and trustworthy mortgage broker, you will be automatically entitled to the following benefits: 

  • A‌ ‌Mortgage‌ ‌Broker‌ ‌Does‌ ‌All‌ ‌The‌ ‌Heavy‌ ‌Lifting‌ ‌For‌ ‌You‌

The best mortgage brokers are regularly in contact with a vast network of lenders, some of which you might not have known about. A proper broker can keep you away from lenders that have onerous payment terms beneath their contracts. They can even help you get in touch with proper private mortgage lenders.

However, it would also do you good to do a little bit of research by yourself especially when you want a broker that will give you the results possible. Arguably the simplest way to get an understanding of average mortgage rates available is to look them up online and then utilize a mortgage calculator. With such tools in your possession, you can easily compare rates and acquire extra details when examining‌ ‌the‌ credibility of a potential mortgage broker.

  • Provide Access‌ ‌To‌ Plenty ‌Of‌ ‌Loan‌ ‌Products‌

A mortgage lender provides a huge line of mortgage loans from several lenders. The bigger the networking experience of a broker, the better the loan product and interest rate you’ll get.

  • They’ll‌ ‌Offer‌ ‌Their‌ ‌Services‌ ‌For‌ ‌Free‌ ‌At‌ ‌Times‌

In most cases, a mortgage broker won’t charge you a thing for their services. That’s because the broker is typically compensated by the lender. What you’ll get, is unfiltered mortgage advice without a single cost, and what could be better than that?

However, you need to be wary that some lenders offer a little more compensation than others. 

  • They Can‌ ‌Better‌ ‌Manage‌ ‌Your‌ ‌Fees‌

When working with a new lender, or taking on a brand new mortgage, there are several types of fees that’ll be accounted for, some of which include application fees, appraisal fees, and origination fees. And in some cases, your potential broker can waive a couple or perhaps even all of those fees from the lender, saving you hundreds if not thousands of dollars.

How does The Mortgage Application Process work?

Although a mortgage broker can simplify the process, you need to do some research of your own to ensure they’re using the right approach. Here are the steps to follow to apply for a mortgage loan:

  • Pre-Qualification

This is what starts the loan process. As soon as a lender has all the information about a borrower’s debts and income, it will then be decided how much the borrower can pay for their property.

  • Mortgage Application

A mortgage associate will take the application by phone, in person, or even online if the client is approved for its submission. Once the application has been received, the company will verify the information that the borrower has given.

  • Mortgage‌ ‌Rates‌ ‌And‌ ‌Programs‌

The borrower needs to determine the right mortgage program. This is deciding which loan makes the most sense for your financial situation as well as understanding the benefits that come with it.

  • Acquiring Documentation

The client will submit any relevant documentation to the mortgage associate.

  • Submission

The mortgage associate then shops the application for the best Canadian mortgage financing rate and product.

  • Approval

The mortgage associate will then send the approval to the client via fax or email.

  • Reviewing‌ ‌Commitment‌ ‌From‌ ‌Canadian‌ ‌Lender‌

The mortgage commitment will then be reviewed by the mortgage associate along with the client.

  • Mortgage Documents

If the lender provides you with any other documentation, they need to be sent directly to the mortgage associate within 10 days after approval.

  • Instructions of Mortgage‌ ‌Lender‌

The mortgage lender then sends instructions of the mortgage to the‌ ‌borrower’s lawyer. 

  • Lawyer

Once the loan has been approved, the last thing to do is sign the last loan documents.

Trust Loans Geeks, Your Online Mortgage Aggregator

Loan Geeks has a spotless reputation when it comes to acting as a mortgage broker for virtually any Canadian borrower. That’s because we meticulously compare mortgages from hundreds if not thousands of lenders from across Canada just to find the most suitable one for you along with the lowest interest rate possible.

Conclusion

Now that you have the answer to “how does a mortgage broker work”, just remember that this resource is your ultimate guide. This is what’s in store for you by working alongside a qualified, reliable, and proven mortgage broker. A broker is by far your best chance in getting a better mortgage deal for your mortgage loan with your lender.

Frequently Asked Questions

What does a mortgage broker do?

Mortgage brokers act as liaisons between borrowers and lenders to provide borrowers with a better mortgage loan deal at the best interest rate.

How do you find a mortgage broker?

To find a proper mortgage broker for yourself, you need to start with referrals from friends who have loans. And then be sure to ask the right questions.

How do mortgage brokers make money?

Mortgage brokers usually get paid by lenders and at times by borrowers but never both at the same time.

What should you ask a mortgage broker?

You need to give your mortgage broker all the necessary details to get you the best mortgage loan possible for your property.

How much does a mortgage broker cost?

Most mortgage brokers don’t charge clients, as they’re covered by lenders. However, some do charge a small amount, which is generally between 1% and 2%.

Related post

Leave A Comment