What Does a Mortgage Broker Do?

Sometimes borrowers might confuse a mortgage broker with loan officer or lender; however, there are distinct roles between these roles that borrowers should know about before taking out a mortgage loan. Before purchasing one of their own homes or taking out another loan from an institution like banks or credit unions, prospective homeowners should gain more knowledge on what a mortgage broker does, the benefits they provide, and how to select an ideal broker for themselves. This guide can assist with making this important decision.

What Is a Mortgage Broker? A mortgage broker acts as the intermediary between mortgage borrowers and lenders, helping each connect based on their needs, financial situations and individual situations; finding them the most suitable loan product that best meets each borrower.

Brokers collect all relevant documentation from potential borrowers, such as income statements, asset information, bank statements and employment verification documents. In addition, they will pull credit reports, assess scores and examine debts associated with credit cards or personal loans.

Mortgage brokers will complete a loan application and determine an ideal loan amount, loan-to-value ratio, loan terms and loan type before submitting it for underwriting by lenders.

Mortgage brokers are an invaluable asset in the mortgage loan process and often result in savings over the life of the loan. Once funds have been distributed from a lender, mortgage brokers collect commission fees as compensation for their services – this way all parties involved receive payment at once when their transaction has concluded.