Now that you have narrowed your search for your dream home, it’s time to start looking for the best mortgage.

You can do it by working with a mortgage broker, who will guide you through the complex lending process.

Most likely, you’ve heard of a mortgage broker from a friend who bought a house or contacted he real estate agent. What is a mortgage broker? And what are the differences between a bank loan officer and a mortgage broker?

These are five questions that most people have about mortgage brokers.

What’s a Mortgage Broker?

A mortgage broker is a intermediary between potential lenders and you. The job of a broker is to negotiate with multiple banks on your behalf to find the best loan terms and rate for you. Although people often refer to “mortgage broker”, “loan officer”, they are not the same thing. (We’ll explain more later.)

Mortgage brokers are generally licensed financial professionals and have a stable of lenders with which they work.

They will gather all your documents, pull your credit history, verify your income and verify your employment. Then they will use your information to apply for loans with multiple lenders.

Your mortgage broker will work with the lender and the underwriting department of the bank to find the best loan for you. The closing agent (usually the title agent) and your realty agent will also help you keep the transaction moving smoothly until closing day.

What Does a Beverly Hills Mortgage Broker Make?

Mortgage brokers, similar to most sales professionals, charge a commission. Mortgage brokers generally charge a “loan Origination Fee,” which is usually 1% of the loan amount. This is paid by the borrower at closing.

Mortgage brokers can negotiate no-cost loans for you. The broker will be paid by the lender once the loan is closed. To reduce your out-of pocket expenses, you will pay a higher interest rate. This can lead to greater costs over the long-term.

What makes loan officers different than mortgage brokers? Lenders pay loan officers a fixed salary plus bonuses for the job of writing loans.

Mortgage brokers work for a brokerage firm or on their own and deal with multiple lenders. They also earn a lot of money through commissions. The broker’s commission is determined by the loan amount.

What are some of the benefits of using a Beverly Hills Mortgage Brokerage?

A mortgage broker is your personal loan concierge. They do all the legwork for you. The broker will apply for loans from different lenders on your behalf and negotiate terms.

Many mortgage brokers have connections with many lenders in your area, as well as national, so they can help you get loan fees waived. A mortgage broker can give you the one-on-one attention and accessibility that you won’t get from a bank loan officer.

Another great perk: Lenders and banks often only work with brokers. This allows you to be qualified for loan products if your broker has good relationships with these lenders.

A mortgage broker will save you time. It can take hours to apply and communicate with different lenders. A mortgage broker will save you all the headaches of dealing with all those complicated details.

What Are the Drawbacks?

A mortgage broker costs 1% to help you find lenders and process your loan. If you borrow $300,000.00, you will pay $3,000 to your broker in loan origination fees.

If you are thinking about shopping for lenders, remember that it can take a lot of effort, communication, and savvy to navigate all the complexities.

A broker can help you narrow down your access to large lenders. Some large banks stopped lending wholesale to mortgage brokers after the collapse of the housing market.

This potential obstacle can be avoided by working directly with a lender, particularly if you do your personal banking with the lender. You never know what you might find? It is possible to negotiate lower rates and better terms.

Brokers have the ability to search the market to find you a range of loans. You will only be able to choose from the products offered by banks if you visit them directly.

You should contact at least three lenders if you want to do it your way. Don’t just accept the first offer.

How Can I find the Best Beverly Hills Mortgage Broker?

It’s a good idea to ask your friends and family for referrals. However, make sure that the friend isn’t just passing the name of a college roommate or distant acquaintance. Find out as much information as you can about the broker’s communication style, knowledge, and approach to clients.

Your real estate agent is another great source of referrals. Ask your agent for the names of some brokers he has dealt with and that you trust.

A few companies offer in-house mortgage brokers as part of their services. However, you are not required to use that individual or company.

It is a good idea to interview at most three people in order to learn more about the services they offer, their experience, and how they can simplify your mortgage process.

Make sure to verify that your state’s professional licensing authority has current licenses for mortgage brokers.

You can also check online reviews and contact the Better Business Bureau for information about the reputation of the broker you are considering.

Summary

Talk to a mortgage broker if you don’t have enough time, patience, or knowledge to navigate the lending process by yourself. Ask questions and get to know the process. You’ll feel more confident and satisfied when you walk into your closing.