What is a Mortgage Broker?
By definition a mortgage broker works as a middleman to connect investors or individuals interested in buying real estate with different mortgage lenders to choose the best loan option. For example, Billy would like to purchase a home but doesn't have a clue which loan works best for him. Sandra who's a Mortgage Broker will collect information such as W-2 statements from the past two years, pay stubs, proof of additional income, tax returns from the past two years, verification of employment, credit report, and assets report. Once Sandra receives this information she'll have access to different lenders and will connect the best possible loan in the best interest of Billy. Sandra also has the ability to choose a lower down payment, lower monthly payment option and help qualify for a lower interest rate.
Who Pays Mortgage Brokers?
Mortgage Brokers are compensated by both lenders or borrowers but in most cases are paid by lenders when the deal closes. Which is great for borrowers who generally pay nothing up front. The fee is also seen on the borrower's closing sheet and the fee is typically 0.5% to 3% of the loan amount.
Why Should I Use a Mortgage Broker?
There is some home loans that aren't being advertised to the public and mortgage brokers has access to lenders that potential buyers wouldn't think to look for. Brokers will save you a lot of time when it comes to shopping for a mortgage.
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