If you are thinking about buying a house, you may only be familiar with your own bank and home loan products that they can offer you. If your credit score is a little questionable, a bank that you have been with for years may not want to risk giving you a loan. What do you do? You might choose to seek the help of an independent mortgage broker.
What is an Independent Mortgage Broker?
An independent mortgage broker is an individual who shops for home loans on your behalf. The mortgage broker usually has relationships with several banks and will help you find a bank that is willing to finance your home. Even you have some credit challenges, an independent mortgage broker will work hard to find a loan at a reasonable interest rate.
How do Independent Mortgage Brokers Get Paid?
Independent mortgage brokers get paid via commissions. You might pay a loan origination fee of one percent, meaning that if you get a $250.000 loan, your mortgage broker would get $2500. However, independent mortgage brokers have good working relationships with some banks and that is good for the bank. A bank may not mind paying the commission to the broker on your behalf. Independent mortgage brokers are bound by federal laws that prevent them from using overcharging tactics that brokers used several years ago. That is good for the consumer as it prevents a mortgage broker from taking advantage of individuals who may be desperate to get a home loan.