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What Is a Mortgage Broker?

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What Is a Mortgage?

A mortgage is a lien held by a financial institution on a property in exchange for money borrowed to pay for the property. When finding a mortgage, some people prefer to work directly with a mortgage lender. Another option is to work with a mortgage broker.

What Is a Mortgage Broker?

A mortgage broker is someone who is paid by a property buyer to find a mortgage lender and loan.

What Do Brokers Do?

They are similar to a mortgage scout. A mortgage broker:

  • Evaluates a property buyer
  • Analyzes a property buyer’s credit to determine which lender is the best fit for the buyer
  • Submits loan applications to lenders on they buyer’s behalf

How Expensive Is a Broker?

A mortgage broker is paid a single fee. The exact amount of the fee depends on the mortgage loan. Typically, the better deal the broker can get for the home buyer, the higher the transaction fee.

Is There a Difference between a Mortgage Broker and Mortgage Lender?

Yes. A mortgage broker finds a mortgage for a person. A mortgage lender is a person or company who finances loans in exchange for interest in the property. In other words, the lender provides the mortgage, while the broker finds the lender on behalf of the buyer.

Is There an Advantage to Using a Broker to Find a Mortgage?

Yes. Often, a broker can find lenders who will offer favorable mortgage loan terms that other lenders will refuse to give.

How Can I Check to See If the Broker Is Trustworthy?

The Nationwide Mortgage Licensing System & Registry (NMLS) keeps a database of licensed mortgage brokers. An individual can also check with their state regulator for any disciplinary action filed against the broker.

Do I Need a Real Estate Attorney If I Have a Broker?

Yes. A mortgage broker may not understand complex real estate and mortgage laws that you need to know about before agreeing to a mortgage loan. Thus, it is best to hire a real estate attorney to ensure you are getting the right mortgage. 

Photo of page author Taelonnda Sewell

, LegalMatch Legal Writer

Last Modified: 07-05-2018 05:15 PM PDT

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