what is a mortgage broker?

Answer 1

Someone who does all the searching for you, contacting various banks and lenders to see if they can find you the best deal on a mortgage... They usually get a fee from you, or a kickback from the lender...

Answer 2

Flamingo's answer is dead on. The people claiming things like "they charge you a fortune for things you can do yourself" have absolutely NO idea what they are talking about. As in all professions, there are dishonest mortgage brokers that charge big fees, but this is certainly not standard. This is what a GOOD broker does:

1. Based on a borrower's specific situation and knowledge of HUNDREDS of loan programs, a broker will find lenders and programs that best suit the borrower's needs. This is NOT something "anyone" can do without an extraodinary amount of effort.

2. A mortgage broker knows how to prepare the application and supporting documents in a way the LENDER likes. This helps prevent problems from popping up.

3. Most brokers do NOT charge higher fees than the bank/lender - in fact, many times the fees can turn out to be lower than going to a major bank. Why? Because the broker does much of the work FOR the bank/lender AND has access to wholesale rates.

Just wanted to clear that up - it is annoying to hear people spewing nonsense on things they know nothing about because they (perhaps) had a bad experience.

You can check out my website (not a sales site), which has a detailed explanation of the pros and cons of working with lenders vs brokers. The direct link to that section is http://www.mortgagemystery.com/broker-or-lender.html

Answer 3

The previous answers are on target, a mortgage broker essentially brokers a deal between you and different banks to get you a loan, but I will add the mortgage broker is generally dealing with banks on a wholesale basis rather than a retail basis. Thus they can get you a lower rate from the same bank you walk into and apply for yourself. Also, a broker has different guidelines with those same banks and can many times get a loan to go through when the bank itself would turn it down. Yes we do get paid for doing our jobs, and yes there are some who will charge you more than others, but the average fee is about 1- 1.5% of the value of the loan. If you are getting charged more than that- there is another broker down the block that will do it within that range. And while I am on the fees- the realtor that showed you the house generally makes 3% of the value of the house and you don't hear people complaining about their fees...

Answer 4

Based on your qualifications, this Broker will match you up with programs. The programs are pulled through the wholesale lenders this broker is signed up with. ..and because this broker typically doesn't get paid unless he/she closes your loan, he/she will compare all available programs to make sure he goes with the lender who has the lowest rate. It is rare a mortgage broker can't find you the best rate for the program picked. A broker can be very creative and aggressive as well, finding a way to get you the loan... whereas a salaried loan officer at a bank gets paid regardless if your loan closes or not. Not much incentive to give you the best customer service and find you the best deal.

Answer 5

This is someone who deals with all kinds of different lenders to obtain you the best loan possible. They do their best to obtain the best loan as they have many lenders available to help you. Mortgage Bankers are one lender (for example - Wells Fargo, Washington Mutual - they only offer their loans).

Answer 6

Someone who finds you money at the lowest interest rate. You can do this yourself.

Answer 7

Someone who charges you a fortune for doing what you can do yourself