how mortgage brokers work
a mortgage broker is an intermediary between borrowers and lenders in the real estate market whether a potential borrower is buying a new home or refinancing a mortgage broker is responsible for presenting loan options from various lenders to the borrower for consideration while qualifying the borrower for a mortgage with those lenders at the same time the mortgage broker gathers from the borrower the financial information needed for the mortgage application process this information pertains to income assets debt employment documentation credit history and other data lenders can use to assess the borrower s ability to secure financing and pay a loan the mortgage broker then passes it on to potential lenders the broker determines an appropriate loan amount loan to value ltv ratio and the borrower s ideal loan type they then submit the application to a lender for approval the broker communicates with the borrower and the lender during the entire transaction through closing once agreed upon mortgage funds are loaned in the name of the mortgage lender and the mortgage broker collects a commission called an origination fee from the lender as compensation for their services the borrower may be responsible for paying all or part of that fee in the closing statement the mortgage broker only gets paid when the loan transaction is completed borrowers should search online reviews and ask for referrals from real estate agents friends and family for a mortgage broker who has the right credentials for the borrower s level of experience it s important to work with an individual whom you trust and who provides good service the consumer financial protection bureau is authorized to maintain oversight over mortgage brokers as well as loan originators and servicers advantages and disadvantages of mortgage brokersmortgage brokers vs loan officers