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The Advantages of Using a Mortgage Broker

Posted by  on Apr 16, 2009
 
Mortgage brokers often receive a bad rap for concealing their fees, etc. Why would an honest mortgage broker do this? The sad truth is, not all consumers appreciate the hard work that is done by mortgage brokers. Because consumers dealing with mortgage brokers agree on a fee in advance, it is important that consumers also understand exactly what they are getting for their money, and what it might be worth.

When using a mortgage broker, consumers receive several benefits. Not all of these benefits are obvious to most consumers. For example, with a mortgage broker, consumers are assured of fair treatment because of pricing transparency, and the absence of conflict between broker and customer. Furthermore, consumers get access to wholesale interest rates posted by lenders, which are about 3/8% below retail rates.

A more conspicuous benefit would be that consumers receive the benefit of the broker’s expertise and contacts in shopping multiple lenders for the best deal. This is very useful because navigating through the maze of mortgage brokering is not a simple task. Few hardworking people have the time to sift through the red tape involved in securing a home loan.

Mortgage brokers are always available to relieve potential homebuyers from this time-consuming inconvenience. Mortgage brokers also provide consumers with the broker’s counsel on the least-costly loan programs that meet the customer’s needs. mortgage brokers provide access to wholesale prices posted by lenders, as opposed to the retail prices consumers would be obliged to pay if they shopped lenders. And most importantly, consumers receive the benefit of the broker’s counsel on methods of overcoming barriers to loan qualification.

The truth is that mortgage brokers can shop lenders much more effectively than consumers. Brokers are in the market every day, where consumers are in the market a few times during their lives. Brokers receive price information from lenders daily as a matter of course. They know the features of the transaction that affect the price and underwriting requirements.
Mortgage brokers have relationships with multiple lenders, and are therefore well positioned to find and shop among the lenders offering particular features. If a borrower has poor credit, the potential saving to a consumer from having a mortgage broker do their shopping is very large. Lenders offer lower prices to brokers because brokers perform costly services for them that they would otherwise be forced to provide for themselves. The most important of these services is finding and servicing customer needs.

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