Transaction Middleman

 

When you decide to buy a home and you are shopping for a mortgage by yourself, you might encounter a lot of difficulties not normal for a newcomer. A Denver mortgage broker makes things less tough by connecting homebuyers with appropriate loans, preparing application materials and guiding the borrower-buyer through the whole process.

They also have access to a much wider range of mortgage products. This means borrowers can get more favorable interest rates. They are especially helpful to first-time homebuyers who need the extra support.

The work

Denver mortgage broker are licensed and regulated financial professionals who work as intermediaries between borrowers and lenders. They identify loans that are fit for the needs of the borrowers and compare these rates and terms so that the borrower does not do them.

They can offer mortgage products from their network of lenders. They provide access to a greater range of products compared to loan officers in banks who are limited to the offerings of their own banks.

Guidance

Throughout the process, Denver mortgage broker guide their clients (borrowers) through the application and underwriting procedures. They compile the application materials, collating the borrower’s credit and verifying income and employment information.

Finally, a broker works with everyone who is also working in the transaction (real estate agents, underwriters, and closing agents) in order that the loan closes on time.

Some benefits

A mortgage broker who works with multiple lenders can help borrowers identify the best loans and rates from a broad range of loan programs more than a mortgage banker.

A mortgage broker can help a borrower save a huge amount of time. Borrowers tend to call several lenders individually and try to work over complicated loan offers.

With a broker, a borrower simply works with him to determine how much loan the borrower is likely to qualify for. The broker will then handle all the legwork.

Costs

Mortgage brokers are paid in two basic ways: through fees paid by borrowers or by way of commissions paid by lenders. The amount of fees and commissions are variable, but brokers can earn up to 2.75% of the total loan amount, depending on who is paying.

 Borrower fees are those paid by the borrower typically range from 1% to 2% of the total loan amount. They can be paid as a lump sum at closing. However, they are sometimes rolled into the total loan amount or they are otherwise incorporated into loan fees.

Lender commissions

Lender commissions, ranging from 0.50% to 2.75% of the total loan amount, are paid by the lender after closing. Not many people know that when lenders pay commissions to the brokers, they typically pass these costs on to borrowers by building them into the cost of the loan.

This is why it’s important to discuss the fee structure with the potential broker before applying for the loan.

Brokers help the homebuyer compile the necessary documentation and shepherd them through the application and underwriting process. During closing, the mortgage broker earns a borrower fee or lender commission of between 0.50% and 2.75% of the total loan amount. —this is the broker’s fee structure and is dependent on whoever is paying them, the lender or the borrower.