I Want a Home Loan: Should I Work with a Mortgage Broker?

You know just the type of home you want. Perhaps it’s one large enough to fit your family comfortably, or there is a particular part of town you know would be perfect to live in.

But there’s something you need first – a home loan. So, where do you begin?

You have three options – you can go to your bank or credit union, choose a lender you would like to work with or contact a mortgage broker.

The first two options are familiar to most prospective home buyers, but the third, a mortgage broker, may seem a bit mysterious. What exactly do they do?

It’s quite simple. A mortgage broker will work to secure the best possible home loan for you, find you the best interest rate, and then help you with qualification and loan approval. 

Mortgage Broker vs. Loan Officer

What is the difference between the two? 

A loan officer works for one lender. They are paid a salary and can only write loans for their employer. A license is not required for someone to work as a loan officer.

A mortgage broker is required to be licensed and works independently or as part of a team of mortgage brokers. They are free to work with lenders nationwide. A mortgage broker is typically paid a commission of 1% to 2% of the loan amount. The lender most often pays the fee. 

A mortgage broker helps you, the homebuyer, secure and work with a lender. They search for competitive rates, and work to negotiate the best terms on a loan. 

Is a Broker Right for Me?

Typically, a mortgage broker can be an excellent choice for someone with unique financial situations, such as self-employed, have no W2 income, or have a bad credit history. However, anyone can choose to work with a mortgage broker. 

A mortgage broker is a one-stop-shop to guide you through the entire process of finding and securing a home loan. 

They will do the legwork for you, such as gathering all of the required documents and running verifications for credit, income, and employment. And they will help manage every bit of paperwork that is involved.

The Advantages of Using a Mortgage Broker

There are advantages to working with a mortgage broker when buying a home:

• They have access to many lenders and can shop for the best loan and interest rate for you.
• Your home loan and buying process is streamlined. Mortgage brokers handle everything from your initial application to closing on the home of your dreams.
• You’ll save time and the headache of dealing with all of the paperwork.
• Mortgage broker fees are clearly disclosed on your closing statement. Direct mortgage lenders and financial institutions are not required to do this.
• Mortgage brokers are generally available to work with you on the weekends, when it is prime time for home shopping.

If working with a mortgage broker sounds right for you, or you have questions we can help answer, contact us. We are happy to assist you with this important decision.