Mortgage Loan 101: Broker Basics

The home buying process is full of major decisions to make and steps to follow. For those new to the process, one of the most intimidating and confusing things is often securing the mortgage. You have a lot of options out there for getting the mortgage that you need, including working with your local bank or a mortgage broker. Unfortunately, many people are hesitant to call a mortgage broker due to a lack of understanding. Here's a look at a few facts you should know before you decide where to pursue your mortgage.

You Don't Pay a Mortgage Broker

One of the most common misconceptions that people have is that you have to pay a mortgage broker for their service. This isn't the case. Just like you don't pay your bank lender directly for getting you a loan, you don't pay the mortgage broker either. Their earnings come from the actual lenders that they get mortgages from. 

However, just because the mortgage broker is paid by the lenders doesn't mean that he or she is working in the lender's best interest. In fact, it's in the mortgage broker's best interest to work for you and help you secure that mortgage since they don't get paid otherwise. So, you can be sure that your mortgage broker is exploring every possible loan opportunity for you.

You Don't Need Bad Credit

Some people mistakenly believe that mortgage brokers are only out there to help people with bad credit. They may think that those with poor credit just can't get a loan with a traditional bank, so they have to work with a broker instead.

That's not the case at all. In fact, mortgage brokers work with people with all types of credit, including those with stellar credit as well as those who are struggling. The benefit of a mortgage broker is that they have many loan providers to source your mortgage from, which improves your chances of approval no matter what your credit situation looks like.

Underwriting Doesn't Take Longer

You might think that, because a mortgage broker works with a lot of different lenders, the underwriting process is going to take a long time since it has to go through so many potential providers. This isn't the case, though. 

In fact, lenders that work with a mortgage broker are more likely to complete the underwriting process quickly because they have immediate competition. They know that taking too long to underwrite and determine a loan could cost them that loan, so they work diligently and quickly to come to a decision and close that mortgage.

These are a few of the many reasons why you should consider reaching out to a mortgage lender if you're in the market for a home. Talk with a broker near you today for more help and information.