What is a mortgage broker?
A mortgage broker is an intermediary between a financial institution that offers loans that are secured with real estate and individuals interested in buying real estate who need to borrow money in the form of a loan to do so. The mortgage broker will work with both parties to get the borrower/s approved for the loan. They also collect and verify all of the necessary paperwork that the lender needs from the borrower/s in order to complete a home purchase. A mortgage broker typically works with many different lenders and can offer a variety of loan options to the borrower they work with.
What does a mortgage broker do?
A mortgage broker aims to complete real estate secured transactions as a third-party intermediary between a borrower and a lender. The mortgage broker will collect information from the individual and compare multiple lenders in order to find the best potential loan for their client. Finally, the mortgage broker serves as the loan officer – they collect the necessary information and work with both parties to get the loan settled.
When does a mortgage broker get paid?
A mortgage broker typically only gets paid following a loan settlement and the funds being released. Lenders only pay mortgage brokers based on their own accounting schedules, which may be 30 days or more after the settlement of the loan. The majority of brokers, including Bernie Lewis Home Loans mortgage brokers, will generally not charge borrowers anything up front. A broker earns commission from the lender following settlement based on the loan amount and commission agreement between the lender and mortgage broker.
When should you call a mortgage broker?
You should consider engaging a mortgage broker if you want access to home loans that aren’t readily available to you. If you do not have impeccable credit, if you have a unique borrowing situation like owning your own business, or if you aren’t finding mortgages that will work for you, then a broker might be able to get you access to loans that will be beneficial to you. Many individuals prefer to work with a mortgage broker regardless of their situation because it gets them access to lenders they wouldn’t usually have access to. Mortgage brokers may also be able to help them qualify for a lower interest rate and lower fees than most of the loans that are available.
Key points as to why you need to consider using a mortgage broker:
- Working with a mortgage broker can save the borrower time and effort during the application process, and potentially save them a lot of money over the life of the loan
- Some lenders work exclusively with mortgage brokers, meaning that borrowers would have access to loans that would otherwise not be available to them
- In some cases brokers may be able to get lenders to waive application, valuation, origination, and other fees. It is critical to examine all the fees, both those you might have to pay the broker, as well as any fees the broker can help you avoid, when weighing up the decision to work with a mortgage broker
ACLN 388 533 – Credit licensees must comply with the responsible lending conduct obligations in Chapter 3 of the National Consumer Credit Protection Act 2009 (National Credit Act).