By financen | January 14, 2021 - 5:58 pm - Posted in Mortgage

If you are a home buyer looking for a loan, it would be in your best interests to hire a broker. Hiring an experienced and competent professional brings a lot of advantages to the table. However, there are some important things you should know before hiring one.

What Does A Mortgage Broker Do?

A broker is a middleman who connects borrowers to lenders. He/she also manages mortgage loan processes for their customers. Brokers also help their clients to approach new lenders or manage fees. This saves their clients from the numerous hassles they would have gone through if they did it by themselves.

Their duties include ensuring that the terms and conditions of the transaction are understood by the customer, and searching for the best deals for their client. They are also responsible for submitting all the paperwork to the client and ensuring that their client gets an option that saves money. Click here to learn more about the duties of a broker.

Who Needs a Broker?

If you need a loan for a house, car or any other property, a good broker will help you obtain them at the best interest rates possible, without all the stress involved. Brokers also present you with loan opportunities that you would not have found if you were searching by yourself.

Benefits of a Mortgage Broker

Mortgage brokers bring various advantages to the table such as…

1. The Expertise and Skills Necessary to Meet Your Requirements

Brokers lead their clients through the various procedures involved with obtaining loans, handling any issues on the way, and also taking care of the process of the transaction. If, for instance, their client has poor credit, they look for lenders who are more favorably disposed to meet their client’s needs. Because of their knowledge in these matter, they are also helpful to people who want to obtain larger loans from institutions such as banks.

Note: Keep in mind that some banks don’t work with mortgage brokers.

2. Saves You a Lot of Time

Instead of filling forms for individual lenders, you are only required to fill one if you are working with a broker. He/she also provides you with a comparison of the recommended loans and points out closing costs, cost differences, and rate points of each loan. This saves you a lot of time in the long run, and ensures that you go through all the best available options.

3. Saves You a Great Dealof Money Without Any Hidden Costs

Brokers receive loan offers from lenders from a wholesale perspective. Some have even built long-term relationships with the lenders. As a result, their clients are offered the best available rates. This lowers the overall cost of the loan for the borrower. Good mortgage brokers should give you the details of the total loan cost and also inform you of how they receive payment for their work.

4. Searches for the Best Deals Available

Rather than preserving the interests of lending institutions, good brokers should have their client’s interest at heart. They act as knowledgeable consultants and agents for their clients. Good brokers also offer great value when it comes to loan products, interest rates and repayment amounts. This comes as a result of having access to various mortgage products. In order to identify your needs, a broker will interview you.

Depending on the situation, the loan may be more demanding than a 15 year or an ARM (adjustable rate mortgage). In such cases, complex strategies and solutions are required; this is another benefit of hiring reputable and experienced brokers. With their years of experience in the field, they can easily and efficiently plan everything out for you. You can visit sites such as for some of the best mortgage brokering services for readers in Australia.

5. Gives You Access to Numerous Loan Options

Due to their network and years of experience, competent brokers can offer you different loan options from various lenders. This increases your chances of getting your loan at the best interest rate possible.

Downsides of Hiring a Mortgage Broker

Despite the various benefits that come with hiring mortgage brokers, there are also a few disadvantages which you should take into account such as…

1. Diminished Benefits Today

In the market of today, you may not benefit much by enlisting a broker. In previous times, brokers were hired by people who had trouble accessing lending programs by themselves. However, today, you simply have to do a search online and compare the available lenders. As a result of this, you don’t have to spend money paying a broker. Even though some lenders don’t work with brokers, this doesn’t mean they are obsolete. You can still hire them to help you with your loans.

2. Not Always Working to Preserve Your Interests

If we are being honest here, no broker is going to tell you that they don’t have your best interest at heart. However, there are some that don’t. Most brokers try to connect you to a lender that meets your needs but some will direct you to lenders that will pay them higher commission. The rates offered by such lenders may not be ideal for you and may be more expensive than what you are comfortable with. That’s why you must choose the best mortgage broker available. It’s important that you check carefully to ensure that the broker isn’t just looking for his/her own personal gain.

3. Cost to Hire Them

One major downside of hiring brokers is paying them. They receive payment from you, even if you don’t pay them directly. Some lenders will give them a fee for bringing a customer. In some cases, their fee is subtracted from the loan, regardless of the process. In such cases, the chances of getting a discount from your bank are slim. As a result, the broker’s payment is added to the loan’s closing cost. This may not seem like a big deal to some people, but you need to keep in mind that every dollar counts.

How Much Would It Cost To Hire A Good Broker?

The fee collected by most brokers is a combination of payments from the borrower and from the lender. The price varies depending on the expert you hire. However, they take about 1% to 2% of the total loan most times. Always ensure that you are informed about their fees before enlisting their services in order to avoid any surprises when you finish a transaction.

When Do Brokers Receive Payment?

Most times, brokers receive payment after the release of funds and when the loan is closed. This depends on the accounting schedules of the lenders. In some cases, this could be a month after closing the loan. To learn more about this, you can read this article.


Enlisting the services of a mortgage broker opens up a lot of opportunities. You get a wide range of loan options and have access to the best interest rates available. Even if you have poor credit, they can connect you with a lender that can provide you with the amount you need to buy a property. In a few cases, he/she may be looking for his/her own gain. It is advised that you ensure that whoever you hire has your best interests at heart.

This entry was posted on Thursday, January 14th, 2021 at 5:58 pm and is filed under Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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