Mortgage brokers: What
they do and how they help
homebuyers
What is a mortgage
broker?
A mortgage broker is a go-between who
matches borrowers with mortgage lenders. If
you are buying a home or refinancing, a broker
can help you find the best mortgage for your
needs. They work with everyone involved in
the lending process, including real estate
agents, underwriters, and closing agents.
How do mortgage brokers
work?
Mortgage brokers act as agents for borrowers,
working with many lenders to find them the
best mortgage for their situation. Some lenders
only work “wholesale.” It means they operate
exclusively through other professionals and not
directly with the public. So, to gain access to
their mortgages, a borrower has to go through a
broker.
How much does a mortgage
broker cost?
The mortgage broker cost, or mortgage broker
commission, tends to vary. Nonetheless, it
typically ranges from 0.50% to 2.75% of the loan
principal. Federal law caps broker fees at 3% and
requires that they not be linked to the interest
rate of a loan. In any case, before you commit to
working with a broker, ask about fee structure
and what you might be responsible for paying.
Why use a mortgage
broker?
You must not let the mortgage broker cost stop
you from bring a broker on board. If you use a
broker, you will enjoy the benefit of a more
personal experience. You will also have a
licensed professional to do all the legwork for
you. Then again, there are a couple of
drawbacks you need to consider before you
decide to hire one.
How to find a mortgage
broker
Finding a reliable mortgage broker requires
some homework. Here are a few steps you can
take to make your choice.
• Ask your real estate agent, family, and
friends for referrals.
• Consider communication style, level of
expertise, and how they manage their
clients’ needs.
• Interview the brokers. Ask as many
questions as you can.
Thank You
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