Frequently Asked Questions About Mortgage Brokers

Have you finally decided to pursue your dream house? If so, you are probably on a journey to finding financing for your dream house. One option you can take is mortgage. A mortgage is basically a loan that you can apply for in order to secure financing for a house. This could either be for refinance or purchase mortgage.

Applying for mortgage will be much easier when you seek the aid of mortgage brokers. These brokers act as middlemen or liaisons between borrowers and lenders, working with both sides to make sure that everything goes smoothly. Truly, applying and qualifying for mortgage will be much easier with a mortgage broker by your side. If you are interested in getting a mortgage broker, here are some frequently asked questions about mortgage brokers.

  1. Are they free? You should know that brokers charge fees that can greatly vary. They can also receive compensation from the lenders that they will help you with. Brokers can also ask you to pay broker fees from your own pockets and if they don’t ask you this directly, chances are the brokers are getting paid by the lenders which mean that you may receive higher rates.
  2. Do they cost more? When you compare them with retail banks, the great thing about brokers is that most of the time, they offer competitive rates so they could match or even beat out retail banks. They are also the ideal option as they could shop for numerous lenders at once.
  3. Do they need licensing? Yes, they do. Brokers would need to get licensed and undergo criminal background check before they could function as mortgage brokers. They are also required to complete a pre-license education among other requirements.
  4. Are they regulated? Yes they are. They are actually regulated on both state and federal levels which mean that they would need to comply with an extensive number of rules and regulations.
  5. Are they able to service loans? Under normal circumstances, they can’t. Their job is to work with the banks that would potentially fund your loan.