Mortgage brokers are well-versed when it comes to helping homebuyers get a mortgage. From finding the best interest rates and lowest fees to completing the application, they’ve done it all. But if you’re a first-time homebuyer, you may not know what to expect when working with a mortgage broker, including whether or not you need to pay them.
At Atlas Crown Mortgage, we understand that the home buying process can be stressful. We have over 25 years of experience helping our clients in Phoenix and Scottsdale find the best mortgage rates. Our goal is to help you get your dream home, so we’ve compiled the information below to help relieve some stress.
Below, we discuss how mortgage brokers in Phoenix can help you and whether you will need to pay them for their help.
A mortgage broker is a middleman that matches borrowers with mortgage lenders. If you’re purchasing a home, a broker can help you find the best mortgage for your situation and needs.
Their work includes helping borrowers determine what size mortgage they may qualify for and the different mortgage options available to them. However, mortgage brokers are not lenders. They originate mortgage loans and place them with lenders, who distribute the funds at closing.
The answer is that it honestly depends on your situation. Mortgage lenders usually pay brokers a fee or commission after the loan is paid out. Some brokers may charge you directly instead of the lender. It is usually a flat fee that can be financed with the mortgage or paid at closing.
A mortgage broker’s commission varies depending on the lender. However, their pay typically ranges from 0.50 percent to 2.75 percent of the loan principal. Federal law caps broker fees at 3 percent and requires them not to be linked to the interest rate on a loan.
When a mortgage broker charges the borrower, they can expect to pay a fee between 1 to 2 percent of the loan principal. Before you agree to work with a broker, ask about their fee structure and what you are responsible for paying.
There are vast differences between mortgage brokers and loan officers. As discussed above, mortgage brokers are not responsible for funding mortgages. Rather, they act as a middleman to originate and close mortgage loans between lenders and borrowers. Brokers work with various lenders like commercial banks, credit unions, and other mortgage companies.
On the other hand, loan officers are employed by a bank or credit union and are limited to providing the loan products of their employer. Their job is to assess borrowers and authorize or recommend approval for loans.
Loan officers may not be as knowledgeable as mortgage brokers because they only work with one bank. If you want to assess several options, working with a mortgage broker may be your best option.
Purchasing a home doesn’t have to be so stressful. With the right preparation and assistance, it can be a streamlined and efficient process.
If you’re looking for a dependable mortgage broker in Phoenix and Scottsdale, AZ, contact Atlas Crown Mortgage to schedule an appointment. With over 25 years of experience providing clients with excellent service, we’re here to help you find the best mortgage rate for your dream home.
Rates fluctuate daily, we'll let you know when it's time to buy, or refinance!
