A mortgage broker acts as an intermediary between the borrower and the lending institution. The broker’s principal job is to find a bank or direct lender for the borrower’s home loan, which should include the best interest rate and terms for the borrower’s specific circumstances.
Now that the formal definition is out of the way, we can discuss what a mortgage broker does in more general terms.
What do the best mortgage brokers do for their clients?
- The best mortgage brokers show you how to qualify for the lowest interest rate and save money.
- Mortgage brokers shop lenders to get the best mortgage for your specific circumstances, unlike banks and credit unions that can only provide their company’s loan products.
- Mortgage brokers deal with the lender on your behalf.
- Mortgage brokers help you apply for the mortgage and fill out all the necessary forms.
- Mortgage brokers work with you throughout the entire loan process until you close, so they are typically more accessible to help you than loan officers at retail banks.
The benefits of using an experienced mortgage broker:
- Save money.
- Makes getting a mortgage easier.
- Close more quickly.
Related: How to Get the Best Mortgage Rate
Should You Use a Mortgage Broker or Bank?
Many people question whether they should use a mortgage broker, bank, credit union, etc.
Answering this question is a personal choice, so here are four things to consider:
- Rates and Fees: Ask loan officers for a free quote regarding rates and fees. Compare quotes that are obtained on the same day, because rates frequently change. Be aware of estimates on closing costs that can change, and may differ between quotes.
- Experience: There is a significant difference between mortgage brokers and bank loan officers regarding experience and licensure requirements. Brokers are required to be licensed and adhere to continuing education guidelines, but loan officers who are an employee of a bank are not required to be licensed by the state.
- Competence and Ethics: Unfortunate, there are loan originators who are only interested in making a sale. So, be sure to ask questions. A good lender will be happy to answer your questions, so you understand the intricacies of the loan process. If you don’t feel that you are getting good answers to your questions, it may be because the loan officer doesn’t know the answers, or worse yet, doesn’t care. If you are not comfortable with a particular loan officer, interview others to find a better fit.
- Time to Close: When you buy a home, you usually have a set closing date. Ask your lender how long it typically takes to close, and whether he foresee any issues in making your closing date.
Most importantly, shop around for a mortgage. If you talk with multiple people and companies for a mortgage, you’re more likely to find the right loan originator for you.
Marimark Mortgage serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.