Many potential homeowners who are considering how to finance their dream home think of going to a bank or other type of traditional lender themselves. However, there is another option: they can hire a mortgage broker to handle the research and comparison shopping for them. These professionals have access to products, rates, and other information from a number of different lenders, which means they may be able to help borrowers find better options. Mortgage brokers may even be able to work with lenders who are out of state or those that borrowers would otherwise not know about.
Most borrowers who have not worked with a broker before assume that the broker will charge them a fee, but that is not true. Instead, the lender actually pays the broker a commission because the broker generally reduces the lender's costs in several ways. The broker does not make any decision on the loan; they simply submit the loan for the homebuyer.
Because there is no additional cost to the borrower, working with a broker may be the best option. Here are a few of the advantages mortgage brokers offer:
- Brokers can assist those who do not have perfect credit or may have difficulty qualifying for a mortgage on their own.
- They have detailed knowledge about different lenders and may be able to find a lender who specializes in the type of home the borrower is looking for.
- They help borrowers get all of their documentation together so there is no need to constantly file additional paperwork.