What is a mortgage broker, and should I use one?

If you’ve begun shopping for a new mortgage, you may be feeling daunted. With so many competing lenders and mortgage options, finding the best loan can easily overwhelm even the best of us.

Fortunately, you don’t have to go it alone. Whether you want help making the best mortgage choice, or don’t have time to manage the cumbersome back-and-forth process, or simply want to secure the very lowest rate possible, a mortgage broker may be the perfect professional to enlist.

Mortgage brokers serve as an intermediary between you and an ultimate lender. But before reaching a final selection, the broker does all the legwork of collecting your documents, checking your credit, income and employment, and applying for several loans on your behalf.

In addition to serving as a mortgage concierge, brokers also offer access to a wide variety of lenders and products. Because they typically have relationships with a stable of lenders, and will also seek out any additional mortgage products that might well suit your needs, brokers can often lead you to a lower rate or better terms than you would have unearthed yourself.

And that’s just the shopping and selection process. After choosing a lender, the mortgage broker also helps you complete the loan’s underwriting and closing.

Of course, you’re right to assume this service comes at a cost. Mortgage brokers are licensed and regulated professionals, and generally are paid by charging a loan origination fee. The typical fee is 1 percent of your loan amount, so closing on a $250,000 mortgage would carry a $2,500 mortgage broker’s fee.

For that price, mortgage brokers can transform the entire home loan process from lengthy, time-consuming, and sometimes confusing to a much easier and efficient process that may additionally save you money over the life of your mortgage.