broker. In this article, you will know who mortgage brokers are, what they do, and if you need one.
Who is a Mortgage Broker?
A mortgage broker is a professional that connects you to potential lenders. The mortgage broker simply carries out actions on your behalf and meets with various banks all in a bid to get mortgage lenders that are willing to lend at an interest rate that you are comfortable with. When you work with mortgage brokers, you do not need to go around looking for lenders as they have this covered.
Mortgage brokers have the license to take a look at your credit history, your financial documents, and your employment status and apply for the right loan based on the details in your documents
How Do Mortgage Brokers Earn a Living?
While a Brisbane mortgage broker usually gets their payments from the lenders, there are times they are paid by borrowers. On no occasion, however, do they get paid by the lender and the borrower.
When a mortgage broker gets paid by the lender, this amount is usually about 0.5% to 2.75% of the amount borrowed. The situation in which a lender pays a mortgage broker is called a Lender-paid compensation. On the other hand, if the borrower pays the mortgage broker, it is called a borrower-paid compensation.
When looking to work with a mortgage broker, it is vital that you know their lender-paid compensation rate, as well as their borrower-paid compensation rate before going ahead to do business with them.
How do Mortgage Brokers Differ from Loan Officers?
Unlike loan officers that are employed by a lender and make their money from the salaries paid to them by a lender alongside the bonuses they get when they write a loan, mortgage brokers are not employed by a single lender. They either work on their own or with a mortgage brokerage firm.
Mortgage brokers do not earn a salary like loan officers. Their income basically comes from the fees they are paid by a lender.
How Important is a Mortgage Broker?
You might not think you need a mortgage broker. The truth, however, is when you work with a mortgage broker, you can get very competitive mortgage rates, as well as negotiation terms without doing much.
The process involved in applying for a loan with various lenders is very time consuming and might cut into the time you need to carry out your daily activities. In addition to the time spent in applying for a loan, a lot of time is also spent in keeping the transaction going. With this in mind, you will be able to achieve a lot without even lifting a finger when you work with a mortgage broker.
How to Choose a Mortgage Broker
When looking to choose a mortgage broker, you will need to make use of lots of referrals. You should not work with a mortgage broker just because someone referred them to you. You should work with a mortgage broker that someone you trust has already worked with.
In addition to referrals, you need to do a lot of research to help you make the right choice.