What are Mortgage Brokers?

Mortgage brokers are real estate financing professionals who bring together borrowers and lenders during mortgage transaction. Their prime function is to become intermediary between consumers and lenders as well as help consumers to understand variety of options of home loan features.

The person who represents you, as a potential consumer, to the home loan lender is a broker. It is the brokers job to handle the paper work on your behalf and conduct the market research to ensure you get the best deal.

Very often you could land up dealing with what is known in the trade as a ‘sunshine broker’ an unscrupulous person who promises you a fantastic rate but ‘forgets’ to tell you that there are a number of fees that have to be factored in still. When you finally add up your account, you may be in for a nasty shock!

Fortunately, as the market has evolved, a system of ethical brokers has also developed along with it. There is a system of brokers called Upfront Mortgage Brokers who work within a highly evolved code of ethics. They will ensure that every fee or payment is listed out on paper for you to compare and take an informed decision. You may initially feel that the fees that the mortgage broker is charging are high, but you can be sure that there will be no surprises at all.

Actually, the brokers fees may depend on the amount of work he anticipates to do on your behalf. If you have a bad credit record or are short of some documents, he will probably have to exert himself more and will charge higher. But, and this is important, the charges will be stated upfront.

Yet another reason for using a mortgage broker relates to his knowing the various niche markets that you would otherwise never be able to find out. I know of a couple who were unable to raise enough mortgage, till the broker discovered that the wife was a doctor and was able to get them a plan that provided for 100% mortgage for doctors!

Besides this, the mortgage broker scores over the sunshine broker in another important manner. The upfront mortgage broker is able to get discounts from the actual lenders due to the volume of business he transacts with them. This discount he is duty bound to pass on to you directly. A sunshine broker would also be negotiating discounts, but you now know where they would go.