large purchases, people generally like to shop around, compare deals and make
sure they’re paying the right price. That could be for a car, a new computer, a
home warranty or a home mortgage. Most people don’t rush into purchasing the
first one they see. The process of making sure you’re getting the best deal can
take time and effort. Wouldn’t it be great if you could have an insider give
you free advice on where to get the best deal? With a home mortgage, you can!
That insider is called a mortgage broker and they work with lenders to get you
the best deal for a mortgage. Landmark, a home warranty company, takes a closer
look into what a mortgage broker is and what they do.
What is a
broker is a middleman between a homebuyer and mortgage lenders. They work with
many different lenders and thus knows how each of their mortgage’s compare. As
a buyer, you would provide the mortgage broker with your credit score and
financial information and the mortgage broker will find the best lender for you
and your financial situation. A mortgage broker will let you know what loan you
qualify for and what you can afford. Of course, homebuyers could do this
themselves, but it saves a lot of time and hassle to have someone with an
insider-view do the legwork for you, especially when you don’t generally have
to pay them upfront. Mortgage brokers can also steer individuals away from lenders
who have tricky contracts and payment terms. A mortgage broker works between
the buyer and the lender throughout the entire loan process. This means they
will find the loan that fits a buyer’s needs for the home they want, and
whatever the real estate transaction includes, like a home warranty or
inspection fees. (Most of the time a home warranty will come with the home
through a real estate transaction, however.)
Some buyers with
lower credit scores like working with a mortgage broker because they have
connections with lenders who will be willing to work with individuals who have less
than perfect credit. Other buyers like working with mortgage brokers because
they get loan deals from lenders because they have relationships with the
lenders. Some mortgage brokers also help homebuyers save money by elimination
appraisal and application fees for loans.
What is the
difference between a mortgage broker and a loan officer?
Quite simply, a
loan officer works for a specific lender and a mortgage broker has regular
content with a large amount of lenders to get the best loan for your situation.
A mortgage broker does not originate a mortgage. That means that they don’t write, create or loan the money for a mortgage. A mortgage broker is simply the middleman between the buyer and the lender. A mortgage broker works between the buyer and the bank like a home warranty representative works with the homeowner and the home warranty company. A mortgage broker also works with a variety of different lenders.
A loan officer
on the other hand works for one specific lender. If you choose to work with a
loan officer they will know how to get you the best deal on a mortgage in their
company, but can’t compare those deals with outside of the lending office. A
loan officer writes the loans for their lending institution.
How is a
mortgage broker paid?
Some buyers are
concerned about working with a mortgage broker because they assume they’re
being paid based on the cost of the loan they sign. This is not true, and also
is illegal thanks to the Dodd-Frank Act. This act states that a mortgage broker
cannot be paid from your loan’s interest or for signing a buyer up for a
specific lender. Instead, the mortgage broker is paid one to two percent from
the loan and is either paid by the buyer or by the institution- not both.
How do you
choose the best mortgage broker?
There may be some brokers out
there who don’t have your best interests at heart. Take your realtor’s
recommendations. They will recommend a trusted mortgage broker, home warranty
company and inspector.
Landmark provides coverage for
systems and appliances within a home. A home warranty covers all of the major
electrical, plumbing, and HVAC systems inside of your home. A home warranty can
come with a home through a real estate transaction or put ona home that has
been owned for years. If an appliance or system breaks down from normal wear
and tear, a home warranty will pay to repair or replace the failed system or
appliance for a flat rate fee of $60. For more information about getting a home
warranty for your home, go to Landmark’s main page at www.landmarkhw.com.