What Does a Mortgage Broker Do?
This is a question I get asked often. What exactly does a mortgage broker do? Let’s start with what a mortgage broker doesn’t do. A mortgage broker does NOT lend someone money. A mortgage broker serves as an independent agent or intermediary between banks and other mortgage lenders, and you, the borrower. Working on your behalf, mortgage brokers shop for loans from multiple lenders to get you the financing that best meets your needs.
What are the benefits of using a mortgage broker?
Qualifications
Mortgage brokers must be licensed in the state of California. They must pass a credit check and a criminal background investigation. Pre-license education is required as well as yearly continuing education after the license is obtained.
Mortgage brokers fall under and must comply with, federal and state regulations and business rules. Through the NMLS consumers can access broker records to verify if and where a broker is licensed and authorized to conduct business and to check if any prior actions have been taken against them.
Loan Programs
Mortgage brokers provide access to a large network of lenders and a wide range of mortgage products. They have access to far more loan products than large-scale banks. After determining your personal and financial qualifications, a mortgage broker will shop national and regional lenders that offer the program that best suits your needs. Their products generally include FHA loans, VA loans, jumbo loans, USDA loans, and reverse mortgages. They also offer a number of non-QM programs such as bank statement programs, self-employed borrower programs, investor programs, foreign national programs, and asset depletion programs.
Since some lenders work exclusively with mortgage brokers, a mortgage broker will give you access to loans that would otherwise be unavailable to you. Mortgage brokers are often able to find programs for clients that were turned down by banks. They can get a loan for borrowers that have bad credit, low-income, low down payment or a recent bankruptcy, short-sale or foreclosure.
Advantages
- If there are any challenges in your financial history, brokers can deal with it early in the application process and find a solution to get you approved.
- A mortgage broker’s compensation is clearly disclosed on your closing statement whereas direct mortgage lenders and financial institutions do not have to disclose this.
- Large companies move slowly. A broker can reduce turn times and paper shuffling. And fewer people will have access to your personal information.
- Unlike mortgage brokers who are licensed, loan originators working for depository banks do not have to be.
- Mortgage brokers have less overhead which means lower mortgage rates and lower fees for you.
- Mortgage brokers comparison shop, select and negotiate the most favorable interest rates and terms to meet your financial situation.
- Mortgage brokers manage your loan from start to finish—from application to closing. Banks have multiple divisions and numerous people involved that may not be familiar with your file.
- Mortgage brokers are more accessible. Most mortgage lenders and banks do not work on weekends. This is the most important time to be available because it’s when most home buyers are shopping and have questions.
Is a mortgage broker right for you?
If you are ready to purchase or refinance a home, look to a mortgage broker to help you find the lowest rates and fees for your home mortgage. In the fast-moving San Diego real estate market, having someone you can trust is essential. If you value personal service, a wide variety of loan options, and low-interest rates, then you may want to consider a mortgage broker. If you’re looking for a great San Diego mortgage broker, I know just the guy!
