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When makinglarge purchases, people generally like to shop around, compare deals and makesure they're paying the right price. That could be for a car, a new computer, ahome warranty or a home mortgage. Most people don't rush into purchasing thefirst one they see. The process of making sure you're getting the best deal cantake time and effort. Wouldn't it be great if you could have an insider giveyou free advice on where to get the best deal? With a home mortgage, you can!That insider is called a mortgage broker and they work with lenders to get youthe best deal for a mortgage. Landmark, a home warranty company, takes a closerlook into what a mortgage broker is and what they do.
What is amortgage broker?
A mortgagebroker is a middleman between a homebuyer and mortgage lenders. They work withmany different lenders and thus knows how each of their mortgage's compare. Asa buyer, you would provide the mortgage broker with your credit score andfinancial information and the mortgage broker will find the best lender for youand your financial situation. A mortgage broker will let you know what loan youqualify for and what you can afford. Of course, homebuyers could do thisthemselves, but it saves a lot of time and hassle to have someone with aninsider-view do the legwork for you, especially when you don't generally haveto pay them upfront. Mortgage brokers can also steer individuals away from lenderswho have tricky contracts and payment terms. A mortgage broker works betweenthe buyer and the lender throughout the entire loan process. This means theywill find the loan that fits a buyer's needs for the home they want, andwhatever the real estate transaction includes, like a home warranty orinspection fees. (Most of the time a home warranty will come with the homethrough a real estate transaction, however.)
Some buyers withlower credit scores like working with a mortgage broker because they haveconnections with lenders who will be willing to work with individuals who have lessthan perfect credit. Other buyers like working with mortgage brokers becausethey get loan deals from lenders because they have relationships with thelenders. Some mortgage brokers also help homebuyers save money by eliminationappraisal and application fees for loans.
What is thedifference between a mortgage broker and a loan officer?
Quite simply, aloan officer works for a specific lender and a mortgage broker has regularcontent with a large amount of lenders to get the best loan for your situation.
A mortgage broker does not originate a mortgage. That means that they don't write, create or loan the money for a mortgage. A mortgage broker is simply the middleman between the buyer and the lender. A mortgage broker works between the buyer and the bank like a home warranty representative works with the homeowner and the home warranty company. A mortgage broker also works with a variety of different lenders.
A loan officeron the other hand works for one specific lender. If you choose to work with aloan officer they will know how to get you the best deal on a mortgage in theircompany, but can't compare those deals with outside of the lending office. Aloan officer writes the loans for their lending institution.
How is amortgage broker paid?
Some buyers areconcerned about working with a mortgage broker because they assume they'rebeing paid based on the cost of the loan they sign. This is not true, and alsois illegal thanks to the Dodd-Frank Act. This act states that a mortgage brokercannot be paid from your loan's interest or for signing a buyer up for aspecific lender. Instead, the mortgage broker is paid one to two percent fromthe loan and is either paid by the buyer or by the institution- not both.
How do youchoose the best mortgage broker?
There may be some brokers outthere who don't have your best interests at heart. Take your realtor'srecommendations. They will recommend a trusted mortgage broker, home warrantycompany and inspector.
Landmark provides coverage forsystems and appliances within a home. A home warranty covers all of the majorelectrical, plumbing, and HVAC systems inside of your home. A home warranty cancome with a home through a real estate transaction or put ona home that hasbeen owned for years. If an appliance or system breaks down from normal wearand tear, a home warranty will pay to repair or replace the failed system orappliance for a service call fee. For more information about getting a homewarranty for your home, go to Landmark's main page at www.landmarkhw.com.
References:http://www.investopedia.com/financial-edge/1112/advantages-and-disadvantages-of-using-a-mortgage-broker.aspx
http://www.realtor.com/advice/mortgage-brokers-paid/
http://www.thetruthaboutmortgage.com/what-is-a-mortgage-broker/
http://www.zillow.com/mortgage-rates/buying-a-home/what-does-a-mortgage-broker-do/
