Best Mortgage Brokers Near Me

The mortgage broker is a licensed real estate professional in the states where the broker sells loans. The broker is typically appointed (qualified) by each mortgage lender they represent.

A borrower who wants to shop for the best loan rates from multiple lenders will approach the broker for assistance. The broker gathers pertinent information for loan approval from the borrower—such as income verification, asset verification, and employment documentation. A credit report will be ordered, along with any other information needed for assessing the borrower’s credit. The broker will help the borrower establish a loan-to-value ratio for the borrower’s maximum loan capacity.

If the client doesn’t intend to borrow the maximum amount for which they are qualified, no pre-approval letter is usually requested. But if they want to make sure they can get a loan for the maximum amount for which they qualify, the broker will submit their documentation to various lenders for loan pre-approval.

Mortgage brokers don’t work for banks, as do loan officers. They operate as independent real estate professionals—compensated by a commission or a flat fee. Mortgage broker companies also employ brokers as W2 or 1095 employees.

A wholesale mortgage broker is the same as a regular mortgage broker. The term “wholesale” is sometimes used because a broker offers multiple mortgage options from different mortgage lenders that are considered “retail mortgage lenders”, because each of them only offers their own mortgage programs.

Mortgage brokers are typically independent real estate professionals who get paid through commissions or fees for originated loans. Consequently, the hours they work vary by the amount of money they want to make. As an example, a well-established broker may only be available Monday through Friday from 9:00 a.m. to 5:00 p.m. Whereas, a broker new to the business might make themselves available any time that is convenient for their clients.

A real estate broker is an intermediary between a buyer and a seller. A mortgage broker is an intermediary between a borrower and a lender.

A real estate broker provides services to someone either buying or selling real estate—such as marketing and showing a property. A mortgage broker only works with a buyer when the buyer wants to secure financing.

The pros and cons between mortgage brokers vs banks are not as marked as they used to be.

In recent years, banks often do not keep their real estate loans in house. Instead, they sell most of their home loans to secondary markets—some of the same markets that mortgage brokers use. But direct or wholesale lenders, such as banks, typically only sell the loans they make to one or two mortgage lenders—at most. Whereas brokers usually have many more lending markets from which to choose.

If you have difficult loan qualifications, such as low income or poor credit, a mortgage broker may have access to lender markets that work for individuals for whom it’s harder to qualify for a loan.

On the other hand, individuals who have a satisfactory history with a local bank might be able to get special consideration when going through a rough financial period. (The bank has money to lend at its discretion, whereas, the broker can only refer the borrower to a mortgage lender who has no personal relationship with the borrower).

Typically, banks can respond more quickly to problems that arise than can a mortgage broker who doesn’t have the same level of authority over a loan.

Also, mortgage brokers charge a commission for their services. In theory, if you skip a mortgage lender, you will save on the commission. On the other hand, a broker can help you find a loan with better terms than any other loan you could find yourself, helping you save money despite their commission.

The best mortgage loan broker can often get you better interest rates than a bank because they have access to more lender markets. And brokers typically keep a watch out for deals that mortgage lenders often offer, such as discounts on closing costs. An aggressive mortgage broker will sometimes cut their commissions to beat an offer from a bank.

Banks will sometimes match an offer from a mortgage broker. But keep in mind that a loan officer in a large bank can’t adjust the bank’s profit margin as easily as an independent mortgage broker can adjust their profit margin.

Loan officers are paid employees of lending institutions. Mortgage brokers are real estate professionals who are only paid when they originate a mortgage. Consequently, they charge a fee. The fee for the broker’s services is generally between 1% and 2% of the loan amount (based on an average of all the broker’s business).

As previously mentioned, brokers are compensated, on average, from 1% to 2% of the loan amount. This commission is disclosed as a loan origination fee, an upfront fee, or a loan administration fee.

If disclosed as a loan origination fee (or upfront commission), the rates could be higher than 2% for a small loan.

An upfront fee is a flat fee charged by the broker—regardless of the loan amount. This option is popular for borrowers in the market for more expensive homes.

A loan administration fee (paid to the broker by the mortgage company) is a cost factored into the loan’s administrative costs.

Since the paperwork is not proportional to the size of the loan, brokers need to charge a higher rate for small loans than they do for larger loans. But as an overall average of all loans, the commission is usually between 1% and 2%.

It is always a good idea to get quotes from both a local bank and a mortgage broker. The fees that a mortgage broker charges aren’t necessarily any higher or lower than the fees of a bank.

Ask both the bank and the broker to lay out all of the costs for you to review. Start with the loan interest rate, which you could be paying for up to 30 years. Then add all of the closing costs and decide which loan is the best for your needs.

Can a mortgage broker get you a bigger mortgage? The size of mortgage for which you qualify is strictly up to each individual lender—based, to a large extent, on banking regulations. The broker can only get you more money if they have a lender willing to qualify you for a larger loan than the bank will.

Getting prequalified or pre-approved for a real estate loan is an essential first step when buying residential or commercial property. A mortgage broker can issue a pre-approval letter in most states.
But only a bank or a licensed mortgage banker is certainly qualified to issue a pre-approval letter in your state.

Mortgage brokers are the intermediaries between borrowers and lenders. Brokers don’t do the lending, so they can’t approve loans. The mortgage lender does all underwriting.

At the highest level, mortgage brokers are regulated by the Federal Reserve. Regulation Z prohibits certain practices relating to payments made to compensate mortgage brokers and other loan originators.

Mortgage brokers are also regulated at the state level. In total, the mortgage broker industry is regulated by ten federal laws, five federal enforcement agencies, and 49 state laws or licensing boards.

Mortgage brokers have to be licensed by their respective states. And each state can have its own requirements, in accordance with federal law.

Which mortgage broker should you choose? You can go through hundreds of reviews to get help in finding a good mortgage broker. Your local real estate agent can probably make a recommendation. If a family member or friend has recently purchased property, you can ask them how they liked their broker.

But the most reliable way to find the best broker for your situation is to go to RealEstateBees.com and look at our list of top 10 residential and commercial real estate mortgage brokers in your area. Our staff has thoroughly vetted each broker in our directory.

If you can’t find a mortgage broker that you can completely trust, there’s certainly no harm in working with another broker as well. Just keep in mind that brokers don’t have exclusive territories with mortgage lenders. So there is a good chance that each broker could get a quote from the same lender.

Also, keep in mind that if both brokers know they are not working for you exclusively, neither will probably give you their best effort.

No law says that mortgage lenders can’t match rates, but few do. And mortgage brokers normally can’t influence it. More likely, the broker will adjust their commission—if need be—to keep from losing a sale for which they already have done most of the work.

An experienced mortgage broker is not going to waste time and resources trying to help someone whom they think won't qualify for a loan. Consequently, the broker knows to look for the same information as does the mortgage lender—before ever submitting an application.

First of all, they will look at the credit score, the borrower's assets, and the borrower's income.

Total income is factored together with total expenditures to determine the borrower's ability to repay the loan.

They also look at the property and determine its approximate market value in relation to the requested loan amount.

Finally, they take into consideration any red flags that don't add up.