He
is an independent contractor who offers the loan
products of multiple lenders known as wholesalers.
A mortgage
broker counsels on the loans available from different
wholesalers, takes the application, and usually processes
the loan. When the file is complete, but sometimes
sooner, the lender underwrites the loan. In contrast
to a correspondent, a mortgage broker does not fund
a loan.
A mortgage broker works with several lenders to find the
best financing for the purchase of a home. No matter if you
have perfect credit or bad credit, typically a mortgage broker
can find you a lower mortgage rate than if you went with
your neighborhood bank.
It is important to remember that brokers are paid by adding
on a fee or point to the loan, so you should do comparison
shopping even with a mortgage broker.
One Stop Shopping
Online mortgage brokers have reduced time spent comparing
mortgage lenders by consolidating information about several
lenders into one site. Through such mortgage sites, you
only enter your information once to receive interest rates
from several different mortgage lenders.
Compare Rates And Fees
While online mortgage brokers make getting quotes easy,
it is important to still take the time to compare rates.
Your mortgage rate will be based on current interest rates,
the property’s location, your credit score, and employment
history. If you receive a rate quote without providing
this detailed information, then you are just getting a
general estimate.
General estimates for mortgage rates are still a useful
tool to narrow your choices to at least three lenders.
You can then apply for a true mortgage estimate with the
most promising companies. With these true mortgage quotes,
look at both the rates and fees to determine the actual
cost of the loan.
Research Reputable Companies
Interest rates aren’t the only factor to consider
when comparing mortgage lenders. You should also be comfortable
with the lender’s reputation. Unfortunately, there
is not a list of reputable mortgage lenders, but common
sense can protect you from a bad mortgage lender.
First, do research on your top choices for mortgage lenders.
Check out the lender’s website to find their physical
location, list of terms, and available customer support.
Secondly, beware of too good to be true claims, such as
statements that this is the only company that will finance
your mortgage loan. And finally, do not sign any blank
forms from a lender. You don’t know what they add
later.
