What Is a Mortgage Broker and Should I Have One on My Team?
Equity, broker, escrow, convey — with all the unusual terms in real estate, sometimes it can feel like homebuyers are required to learn a foreign language! Whether you’ve purchased a home before or you’re a first-time homebuyer, “mortgage broker” is probably one of those terms that you don’t think about on a daily basis. So, what is a mortgage broker?
A mortgage broker, either a company or a licensed individual loan officer, specializes in connecting homebuyers with multiple lenders. Those lenders will underwrite and fund your loan, and your mortgage broker will earn a mortgage broker origination fee for their broker services. Conversely, licensed loan officers can also work directly for single banks or “direct lenders” that will underwrite and fund your loan themselves.
Mortgage brokers follow the market and make the networking connections to maintain up-to-date knowledge of the home loan industry; they can often offer multiple programs and rates as they can shop between various lenders. This can mean good things for a homebuyer who’s looking to obtain a mortgage loan — though there are some drawbacks to consider.
Some have likened mortgage brokers to travel agents who shop for the best products and deals on your behalf. This comparison is somewhat true on a basic level, but it’s not completely accurate.
Working with a mortgage broker can save you some time and hassle in the home loan process. But committing to a mortgage is far from Caribbean-cruise easy. In the high-stakes business of home loans, you’ve got to be sure that you understand the pros and cons of using a broker, and that your mortgage broker clearly understands your needs and desires and can deliver a great mortgage loan scenario for you.
With that in mind, we talked with Jessica Sanchez, Director of Underwriting and Loan Management at HomeLight, and Debbie Cross, an experienced mortgage broker in Merritt Island, Florida, in order to help you answer this one important question:
Is a mortgage broker right for your homebuying situation?
